Greeters

Katherine De Stephano led the invocation and pledge, and Dustin Walling introduced the visiting Rotarians and guests.

New Member Induction: Adam Mihlstin

President John Martinka introduced and inducted new member Adam Mihlstin. Adam’s classification is Commercial Real Estate, and his sponsor is Brad Baumann.

Japan Relief Update

Sayoko provided the club with a brief update on the relief efforts going on in the areas of Japan affected by the recent earthquake, tsunami, and nuclear reactor incidents.

As she expressed in an earlier presentation, the affected area is huge. Relief donations from the BBRC and the rest of District 5030 are being applied by like-minded Rotarians in Japan who are putting the money to optimum uses in the situation, as opposed to some relief agencies that are sending supplies or goods that are not a good fit for the situation. In sum, this is a success story of Rotary doing what it does best – serving others in need.

World Community Service Update

Steve Szirmai briefed the club on a nonprofit that the committee is supporting: a group of surviving spouses from 9/11 who have banded together to help entrepreneurs from war-torn countries. This is an opportunity to serve simultaneously through two avenues of service: vocational service and world community service.

Homelessness on the Eastside

Steve Roberts reminded the group that he is heavily involved in a nonprofit that helps homeless and needy on the Eastside: Congregations for the Homeless. Steve invited us all to help with their fundraising luncheon on Tuesday, October 4th.

For details about CFH’s mission and specifics on the luncheon, please contact Steve or visit the organization’s website.

BBRC Adoption Party

Past president Chuck Kimbrough appealed to the membership to step up to the plate for the October 1st adoption party. We need at least 15 more volunteers. Up to 40 kids will be attending – a record number for this event. We need more people to pitch in and help to make this party the best ever.

Contact Chuck for more details.

Fellowship Update

Paul Chapman reminded us that fellowship is spelled B‑E‑E‑R. Oktoberfest will be held at Lawrence the Florist at 5:30 PM. on October 15th. More beer.

Paul also reminded us that November 11th is the BBRC Anniversary Dinner. Stand by for more details on that event.

New Generations

President John informed us that this is Rotary “New Generations” month. To emphasize that, Tim Leahy gave an update on our new Rotaract Club by re-introducing President Rani Joseph, along with their new President-Elect, Brad Olson.

The pair briefed the club on their recent rehab project for transitional housing with the KITS organization in Kirkland.

New Member Social

The New Member meeting for October 5 will be a departure from the usual morning meeting. Instead, it will be a pizza social hosted by BBRC member Paul Martin at the Clubhouse for the Kelkari Condos, 1000 Cabin Creek Lane SW, Issaquah. New members and their partners are all invited. In addition, you are encouraged to invite a “Blue Badge” member to attend.

Please RSVP to Norm Johnson with the number in your group.

Rotary First Harvest Fundraiser: The Cabernet Classic

Tom Smith, Rotary First Harvest board member, invited the club to the Cabernet Classic, a winetasting party to be held Wednesday, October 26, at Bell Harbor (on the Seattle waterfront) from 6:00‑9:00PM. The event will feature over 40 wineries, chocolate tasting, and various other fun activities.

Tickets are $50 each, and can be obtained on the Rotary First Harvest website.

This is a great way to recognize clients and other associates, or simply to have a wonderful time with friends, family, and fellow Rotarians.

PROGRAM

“The Current State of the Local Home Building Industry," Sam Anderson, Executive Officer, Master Builders Association of King and Snohomish Counties

Attorney Scott Hildebrand introduced his boss, Sam Anderson of Master Builders, who has been at Master Builders since 1998. Scott established apparent credibility with a whopping two Rotarians by outing Sam as a “Duck.” Quack! He regained credibility with a few of us by stating that Sam is also an attorney.

Sam began with a description of who the Master Builders are: an organization made up of local homebuilders and all of the peripheral vocations that support the homebuilders. They were founded in 1909, and they are the oldest and largest local homebuilders’ association in the US. They have multiple roles. They work as lobbyists with state, county, and municipal governments to facilitate governmental action that helps them get homes built. They are also charitable in their activities. They do a very large number of projects to help various people in need, ranging from building hundreds of wheelchair ramps in homes of the disabled, to performing rehabs on residences for those who can’t afford it themselves.

They have a staff of 36 and an annual budget of approximately $6 million. After a brief guided tour of who they are and what they do, Sam spent the rest of the time giving us his perspectives on the economy and its impact on the housing market. He named it after the famous Clint Eastwood movie: The Good, The Bad, and The Ugly.

Washington has been hit hard. “We have lost over 70,000 jobs in the construction industry in the past five years. Building permits per year have declined in Seattle from 22,140 to 7,400 in this recession. Housing prices have declined an average of 30%, which is rosier than most of the other states. Michigan housing prices are today the same as they were in 1985. The reason we performed better than other states like Michigan and California is that we didn’t experience the huge ‘run-up’ in prices just prior to the drop, and our environmental land-use rules slowed construction so that we didn’t have the same overage in inventory. Finally, banking rules in our state were more restrictive, causing fewer defaults than other states experienced once the recession hit.”

The bottom line: “We are hurting, but we are in better shape than many other states. We have a better overall economic structure; our future is brighter.”

There is still an ongoing battle with cities and counties to make it easier to build and sell houses. However, when the housing market collapsed, the city governments suddenly needed the housing industry because it is so vital to the tax base.

For every 100 homes built, there are 311 local jobs created and $18 million in income. That, in turn, generates $2.8 million in taxes and other revenue for local government. In other words, Sam declared, “The housing industry has been the ‘cash machine’ for the local governments. Because of that, government is now a partner: they need to have the housing industry succeed because that success will drive government success.”

The good news? In Washington, housing prices have stabilized. Bellevue houses can be built for $40 a foot. (It used to be $200 a foot.) Why? The guys who used to own the companies are now wearing the tool belts, and they are hungry for contracts.

Some of the challenges:

• Subcontractors. Nobody will help finance them. There is going to be a recovery, but Sam predicts not until 2014 or 2015. However, we are in the top 20% of states in our recovery to normality.
• Supply versus demand. There is a huge hole in the ability to suddenly build new houses once demand breaks loose.
• New lending rules require 20% down. Sam asserts that the interest rate isn’t the problem – the ability to qualify for the loans is the challenge.
• The uncertainty of the future of the mortgage interest deduction is causing consumer hesitation.

Despite all this, Sam remains optimistic about the future and his organization’s impact. He pointed out that despite the loss of over 1,500 members in his organization in the past two years, they are continuing their strong representation of their trade, and they are continuing to give back to the community to help those in dire need.