New Executive Order Takes on Housing Affordability Issues
In June, President Donald Trump signed an executive order to create a new White House Council to tackle affordable housing issues across the country.
The new council will be chaired by Department of Housing and Urban Development Secretary Ben Carson and will consist of members from eight different federal agencies.
The hope is that with all these agencies working together, interagency processes will be streamlined and as a result, development of affordable housing will occur faster.
“Four nearly four decades, U.S. household incomes have increased at a slower rate than home prices, a problem that was only made worse by the Great Recession,” said John Smaby, President of the National Association of REALTORS® (NAR). “Today, despite historic economic growth and recovery, misguided regulations and gaps in new home constructions have stopped far too many Americans from purchasing a home.
“NAR thanks President Trump for taking much-needed steps to address housing affordability in this country, and we look forward to continuing to work closely with the White House to ensure the American dream remains attainable for all those who seek to become homeowners.”
The newly formed council will meet with leaders from state and local associations to identify the issues that impact affordable housing development and to determine how many of those issues are directly related to federal, state and local regulations on the cost of that development.
The council will focus on finding new ways of cutting regulatory costs.
Areas of the country that deal with the biggest gap between supply and demand of affordable housing also have the most restrictive regulations put on them by the state and local governments. In fact, more than 25% of the cost of building a new home is directly related to costs associated with state and local regulations.
“With housing affordability near a 10-year low, the President’s executive order on this critical issue underscores that the White House is ready to take a leading role to help resolve the nation’s affordability crisis,” Greg Ugalde, chairman of the National Association of Home Builders (NAHB), told Housing Wire. “Given that homeownership historically has been part of the American dream and a primary source of wealth for most American households, the need to tackle ongoing affordability concerns is especially urgent.
“NAHB will continue to work with the White House and Secretary Carson to find innovative solutions to increase the production of sorely needed quality, affordable housing.”
Only seven homes were built for every 10 households formed in the U.S. from 2010 to 2016, according to the Census Bureau.
“With the signing of [this] Executive Order, President Trump is prescribing a powerful treatment that correctly diagnoses the source of America’s affordable housing condition,” Carson said. “This is a matter of supply and demand, and we have to increase the supply of affordable homes by changing the cost side of the equation.”
Carson added that increasing the housing supply of housing by eliminating long-choking regulations, will reduce housing costs and grow the economy.