President Donald Trump has signed an Executive Order establishing the White House Council on Eliminating Barriers to Affordable Housing, and named HUD Secretary Ben Carson as its chairperson.
According to HUD, the new Council will be composed of members from eight Federal agencies, intended to engage with State, local, and tribal leaders across the country to identify and remove the obstacles that impede the production of affordable homes, “namely, the enormous price tag that follow burdensome government regulations.”
“With the signing of today’s Executive Order, President Trump is prescribing a powerful treatment that correctly diagnoses the source of America’s affordable housing condition: 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,” said Secretary Carson. “Increasing the supply of housing by removing overly burdensome rules and regulations will reduce housing costs, boost economic growth, and provide more Americans with opportunities for economic mobility.”
Regulations Impact Cost
HUD notes that the construction of new homes has not kept pace with new household formations, due in part to the fact that over 25% of the cost of a new home is the direct result of Federal, State, and local regulations. Part of the Council’s goals will be to identify policies which artificially increase the cost of homeownership and reduce regulatory burdens.
Nationally, affordability has been the primary roadblock to homeownership, according to First American’s Real Estate Sentiment Index (RESI).
“The main burden, affordability, confirms the strong sellers’ market conditions from 2018 have continued in many markets in early 2019, as demand outpaces supply and prices continue to rise,” said First American Chief Economist Mark Fleming.
To increase affordability, HUD laid out a plan for the new Council, which includes taking action to reduce Federal regulatory and administrative burdens that discourage private investment and housing development and streamline statutory, regulatory, and administrative burdens that inhibit the development of affordable housing supply.