Excessive regulations are creating obstacles for home builders and multifamily developers, says the National Association of Home Builders (NAHB), in their efforts to resolve the nation's housing affordability crisis. NAHB Chairman Buddy Hughes testified before the House Small Business Committee regarding the industry's heavily regulated nature.
Hughes, a home builder and developer from Lexington, N.C., highlighted that regulatory costs significantly raise housing prices. "Regulatory costs, which include complying with building codes, zoning issues, permitting roadblocks and other costly challenges, make up nearly 25% of the cost of building a single-family home and more than 40% of the cost of a typical apartment," Hughes stated. He urged Congress and the administration to reform the regulatory process to make homeownership and rental options more affordable.
The NAHB noted a nationwide shortage of approximately 1.5 million housing units and proposed a 10-point plan to address the issue. Eliminating excessive regulations is central to their plan. Hughes noted that improving the regulatory climate could enable builders to increase housing supply: “The prospect of an improved regulatory climate where federal agencies are limited to regulations that follow the letter and spirit of the law and are tailored to meet the needs of small businesses can lead to more informed, less burdensome rules".
Moreover, new energy code requirements from the Biden administration, enforced by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA), are increasing costs for builders. Home Innovation Research Labs found compliance with these requirements can add significant costs to new homes. The NAHB is urging Congress to take action against these energy standards, which they argue harm housing affordability.
"In these challenging economic times, the significant undersupply in housing coupled with rapidly increasing home prices clearly indicate the need to reduce the regulatory burden on the housing industry," emphasized Hughes. The NAHB is open to collaborating with Congress to reform regulations and enhance housing accessibility.
