Subcommittee Investigates Regulatory Barriers to Affordable Housing


WASHINGTON, D.C. – (RealEstateRama) — The Subcommittee on Housing and Insurance held a hearing on Tuesday on how government regulations impact the cost of housing.

Subcommittee members heard testimony from a panel of witnesses who addressed housing trends and how government policies can promote or hinder the development of affordable housing.

“Government has inserted itself into the business of housing by mandating affordable housing and community reinvestment while simultaneously stifling creation of affordable housing and community reinvestment. It’s time to promote the development and availability of housing for low- to mid-income Americans, not restrict it,” said Chairman Blaine Luetkemeyer (R-MO).

“So today we ask ourselves: where do people go when they reach self-sufficiency? Is the stock of affordable market-rate housing plentiful enough to support the people seeking it? The unfortunate answer is no,” he added.

Key Takeaways from the Hearing:

· The American housing market – including housing demands – has changed since the 2008 financial crisis. Federal housing regulations are too antiquated to address the housing needs of future consumers.

· Regulatory barriers are currently inhibiting the development or preservation of rental housing, affecting the cost of building and maintaining affordable housing.

Topline Quotes from Witnesses:

“Housing is an important source of economic growth and job creation, and regulations are limiting home builders’ ability to grow and contribute positively to the economy. NAHB survey data of builders has demonstrated that, on average, regulation imposed during development accounts for 16.4 percent of the price of a home built for sale; regulation imposed during construction accounts for 8.6 percent of the price. Thus, in total, 25 percent of the price of an average single-family home built for sale is attributable to regulation imposed by all units of government at various points along the development/construction process.” -Granger MacDonald, President, MacDonald Companies on behalf of the National Association of Home Builders

“While overall homeownership rates have dropped, rental rates have been rising. Since the recession, the number of renters in the U.S. increased by double digits. In fact, recent survey results show that renters are now the majority in nine of the 11 largest U.S. metropolitan areas. While there is a robust market for high-end, luxury apartments, affordable rental units are not being built at a rate that is keeping pace with the heightened demand for those units. It is especially difficult for middle-income families to find affordable rental units in large U.S. cities.” – Mechele Dickerson, Professor, the University of Texas at Austin School of Law

“While the HUD Code has brought standardization to the industry, in order for manufactured housing to achieve its full potential in addressing the affordable housing needs of the nation, the administration of the HUD Code should be improved to better account for cost impacts and industry practices.” –F.R. Jayar Daily, Immediate Past Chairman, the Manufactured Housing Division of the Manufactured Housing Institute

“Zoning laws impact what is permitted to be built at a site. In some places, zoning requirements can make it extremely difficult to build new multifamily housing. Changing zoning can be onerous and expensive if it is even possible.” –Clyde Holland, Chairman and Chief Executive Officer, Holland Partner Group, on behalf of the National Multifamily Housing Council and the National Apartment Association

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