February 12, 2020
In late November 2019, the Department of Housing and Urban Development (HUD) announced it would seek solutions to the U.S.’ growing housing affordability crisis. The announcement came on the heels of an Executive Order, signed by President Trump, to create White House Council eliminating regulatory barriers to affordable housing.
In early February 2020, the National Multifamily Housing Council (NMHC) submitted a list of proposed solutions that might help alleviate growing unaffordability.
One suggestion involved decreasing “the number of barriers at the state and local levels,” which include “a development preference that works against multifamily housing production and ultimately worsens the challenge,” the NMHC said. Among these problems are community resistance, as well as preference toward real estate that produces a higher rate of sales tax revenue.
The NMHC also suggested a closer examination of the following:
- Davis Bacon wage requirements, which can “have the adverse effect of artificially raising the costs of housing and development significantly”.
- Environmental reviews across jurisdictions and reviewers, which come with timeline and requirement inconsistencies.
- Fair housing’s “variable and changing standards, inconsistent vocabulary and burdensome review processes.”
- Federal Housing Administration Multifamily Housing Programs, which tends to be “overlooked or underserved by private capital providers.”
- Multiple inspection regimes that apartment owners must undergo.
- Housing Choice Voucher programs, which tend to suffer from duplication inspection processes and other inefficiencies.
- Opportunity Zones, which can provide an important tool to encourage housing renovation and development.
- Multisource financing process, which takes a great deal off time and red tape.
The NMHC also suggested that HUD publish best practices in areas such as density bonuses, parking requirement reduction, by-right inclusive zoning, rent-control policy avoidance, property tax abatement and expedited permits for affordable units.
For comments, questions or concerns, please contact Amy Sorter