Housing Solutions: Cutting Through Government Red Tape (EventID=117547)

Video Description

Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinancialCmte Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Wednesday, July 24, 2024, at 10:30 a.m. (ET) Housing and Insurance Subcommittee Chairman Congressman Davidson and Ranking Member Congressman Cleaver will host a hearing entitled, “Housing Solutions: Cutting Through Government Red Tape." ___________________________________ Witnesses for this one-panel hearing will be: • Mr. Carl Harris, Co-Founder and President, Carl Harris Co., Managing Partner, Harris Homes, and Chairman, National Association of Home Builders (NAHB) • Mr. James H. Schloemer, Chief Executive Officer, Continental Properties Company, and Chair, National Multifamily Housing Council (NMHC), on behalf of NMHC and the National Apartment Association • The Honorable Paul Compton, Managing Partner, Compton Jones and Dresher LLP • Ms. Linda Couch, Senior Vice President, Policy and Advocacy, LeadingAge ___________________________________ Hearing Background Housing affordability remains a serious issue in many areas of the country for both homebuyers and renters. While the private sector can address certain affordability challenges, others – such as those imposed by government red tape – are more difficult to overcome. This red tape, which can occur at the federal, state, or local levels, raises costs and produces costly delays in bringing new housing units online. While not all government requirements are negative, many requirements insert new costs into the system and come with trade-offs. For example, rules that noticeably improve individual occupant health and safety are broadly supported. Yet, others that pursue broader social goals might increase costs with little perceived benefit to residents. Striking the correct balance is essential to preventing market distortions and maximizing consumer choice and product availability. These choices are particularly important now because of the significant impact system-wide costs are having on housing. According to a recent study from the National Association of Home Builders, regulations imposed by all levels of government account for $93,870, or 23.8 percent, of the current average sales price ($397,300) of a new, single-family home. Such policies include exclusionary and restrictive zoning requirements, questionable environmental mandates, and misguided economic policies that have increased the cost of construction and exacerbated the shortage of labor. Other efforts, such as rent control and eviction moratoria, have added new burdens that discourage investment in housing and increase housing scarcity. While these requirements may be borne of genuine concern about limited availability or affordability, they often have the paradoxical effect of producing higher costs and fewer choices in the housing sector. Housing developers must factor in these additional fees and requirements on top of already-high interest rates for borrowing and increased construction costs. These cumulative costs impact consumers in the form of higher rent or more expensive homes. For example, the typical rent across the U.S. is now $2,054, according to the Zillow Observed Rent Index. That is up 3.5 percent from last year, and the fastest annual growth since July 2024. Separately, according to analysis from real estate analytics firm ATTOM, between April and June 2024, homeowners in 80 percent of 589 counties were spending more than 28 percent of their wages on housing costs, including mortgage payments, property taxes and homeowners’ insurance. Finally, cutting government bureaucracy to help lower housing costs is important because wages are not keeping pace with price growth. According to a recent report by Rocket Homes, median household income was $68,710, while the nationwide median U.S. home price was $416,100. This means that average home prices are now six times higher than the median household income. Yet, annual wage growth remains, at 4.9 percent year over year, remains well below the growth rate needed to make up for this price difference. Removing unnecessary costs from the production of new housing units can help to bend this curve and increase general affordability. International Energy Conservation Code (IECC) Many environmental regulations, while often well-intentioned, increase the overall costs to construct new homes that outweigh any benefits. One example is the International Energy Conservation Code (IECC). On April 26, 2024, the Department of Housing and Urban Development (HUD), in concert with the Department of Agriculture (USDA), promulgated a Final Rule regarding new energy standards for properties that receive federally-backed financing... ___________________________________ Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=412618