Three Minnesota Business Sectors Call for Focus on Economy in 2008 Session
Legislators Should Follow Federal Government’s Lead
January 24, 2008 —Leaders of the state’s auto, home-building, and real estate industries, warned of difficult economic conditions and called on Minnesota lawmakers to follow the Federal Government’s lead and focus the upcoming legislative session on the economy.
The comments, made by Scott Lambert of the Minnesota Auto Dealers Association, Susan Dioury of the Minnesota Association of Realtors, and Pam Weaver of the Builders Association of Minnesota, came as a plea to legislators and the Governor to focus on the economy in the coming months of legislative work.
“Minnesota has lost 23,000 jobs in the last six months,” stated Weaver, Executive Vice President of the Builders Association of Minnesota. “The residential construction industry has experienced a significant decline in building permits and construction activity, couple that with auto sales at a 10-year low, a tightened credit market, and slumping housing prices and you’ve got economic conditions that can’t be ignored.”
Economic experts are calling it a recession. And these leaders of key Minnesota industries are calling for the legislature to keep these factors at the forefront of debate when they convene for the 2008 Legislative Session.
“New vehicle registrations are down 21% in Minnesota in the last 4 years,” explained Lambert, Executive Vice President of the Minnesota Automobile Dealers Association, “and for the past two years we have seen a new car dealership close every month.”
“We want legislators to keep in mind that when they start talking about raising taxes or adding more regulation – to a customer that means increased costs and less choice. For many consumers it makes the difference between buying now or postponing their purchase a little longer,” says Lambert.
Weaver agrees, “Regulators just adopted a new building code that will, at a minimum, add $4,000 to the price of the most affordable new construction housing product. And the legislature keeps talking about adding more: installation of fire sprinklers in all residential construction and green building requirements. According to the National Association of Homebuilders, for every $1,000 increase in cost, 1,300 households are priced out of the market. Clearly that’s not the kind of direction the economy needs right now.”
Susan Dioury, of the Minnesota Association of Realtors, is urging legislators to first, do no harm. “The data clearly shows that Minnesota has hit a peak in homeownership rates; but at a price. Exotic mortgages have lead to an increase in home foreclosures and equity tapped out of our homes together have caused a decline in Minnesota’s existing housing values for the first time since the great depression.” The average sales price for Minnesota home sales declined 2.4% from 3Q ’06 – 3Q -07.
Right now, Minnesota cannot afford to add tax and regulatory burdens to Minnesota businesses or its residents resulting in additional job loss and increased costs for consumers. Economic recovery must be legislators’ top priority.
ABOUT BAM: The Builders Association of Minnesota is a St. Paul-based trade association representing over 4,800 members involved in home building, remodeling, multifamily construction, and other aspects of residential and light commercial construction industry. BAM is associated with 14 local associations throughout the state and the National Association of Home Builders as a charter member.
