Hot legislative issues discussed at PDIS
KANSAS CITY, Missouri - Washington, D.C. insiders discussed the current political climate along with major issues impacting the lumber and building materials industry.
In a panel discussion led by National Lumber and Building Material Dealer Association (NLBMDA) President Jonathan Paine, experts gave their take on what might be on the horizon during “A State of Play from Washington D.C.: An Insider Look Into the Political Landscape.”
The conversation took place during day two of the 2023 ProDealer Industry Summit in Kansas City, Missouri.
Credit card swipe fees have been on the radar for the NLBMDA for some time and have been a point of focus for the NLBMDA. The association drove home the point at its most recent legislative conference. ‘
In 2021 alone, credit card swipe fees jumped by 25% to a record $137.8 billion, the NLBMDA said. While heavy retail hitters such as Walmart and Target might not feel the impact of the fees, it’s a major burden for smaller retailers and businesses.
Paine said that credit card swipe fees are the second or third highest expenditure for many businesses. “This is a top priority for the NLBMDA.”
While a vote was expected on the Credit Card Competition Act, the legislation has yet to move forward in Congress.
Stephanie Badger, vice president of the Nickels Group, has been assisting coalitions that support the act. Badger said that the fees are often listed by small businesses as the second highest expenditure after labor costs.
The act has received bi-partisan support in Congress and would require any financial institution with over $100 billion in assets to allow for a second unaffiliated credit network other than Visa and Mastercard. About two dozen banks meet this criteria, according to Jacob Carter, director of government affairs at the NLBMDA.
Carter describes the act as “landmark legislation” and a “heavy lift” for LBM dealers along with independent retailers.
While U.S. Senators Dick Durbin (D-Illinois) and Roger Marshall (R-Kansas) have strong proponents of the legislation, credit card companies are currently spending big bucks on a marketing campaign designed to alarm consumers.
Via television and online ads, the campaign is warning consumers that their credit card points might be taken away if the Competition Act is approved.
“If you live in D.C. you are setting these ads all over the place,” Paine said. “What is imperative is when you meet with lawmakers that you tell them how it affects small businesses and small retailers.”
“Walmart and Target can eat these fees, our members can’t,” Paine noted. “These are real concerns.”
“Your voice weighs the most on these lawmakers’ minds,” Badger added.
A housing crisis continues
On the housing front, an affordability crisis continues.
“We haven’t built enough homes in a long time,” said Alex Strong, senior director, federal legislative, National Association of Home Builders (NAHB). According to Strong, “NAHB has the current housing deficit at around 1.5 million units, while others have it higher, in some cases near 3 million.”
“Each year we have to build about 1.2 million homes to replenish our stock,” he explained. “That’s the root of the problem – supply and demand – too much demand chasing a limited supply.”
Other issues impacting the cost of housing include limited lots, a labor shortage, and increasing material costs. While the NAHB is working with national and regional skilled trades training organizations to help ramp up the labor pool, government costs are an additional major burden on housing costs.
Strong noted that 25% of the cost of a new home is attributable to government regulations on the federal, state, and local level.
“This accounts for about $93,000 in costs on the average home,” Strong said. “That’s outrageous!”
Looking ahead, housing costs could be impacted in 2024 by rising lumber prices. Given recent curtailments at lumber product facilities, particularly in Canada, the result might be a shortage.
“We are concerned that when things pick back up in the spring, elevated lumber prices will return,” Strong said.
And a shortage of materials and labor for building new power transformers isn’t helping matters either.
“It’s death by a thousand cuts,” Strong said.
During closing remarks, Pained said the NLBMDA continues to work with the NAHB while collaborating on industry issues.
“There are a lot of challenges that we are working for on your behalf. This is why we exist,” Paine said. “We are fighting the good fight.”
