This week the National Association of Home Builders commended House Financial Services Committee Chairwoman Maxine Waters for proposing draft legislation to address the nation's housing affordability crisis and called on the administration and Congress to make this issue a national policy priority.
Testifying on behalf of NAHB before the House Financial Services Committee, Steve Lawson, chairman of The Lawson Companies based in Virginia, said that the legislation drafted by the California Democrat underscores the role that additional costs, such as fees associated with infrastructure, play in housing affordability.
"The 'Housing is Infrastructure Act' focuses on reducing development costs for low-income housing," said Lawson. "This bill represents a positive step forward to remove barriers to affordable housing and will help builders and developers to construct housing at lower price points."
While the legislation would provide increased funding for important affordable housing programs, seek to lower impact fees and streamline the development process, Lawson cited several other steps that lawmakers should take to improve housing affordability.
"Addressing labor shortages in the construction industry, ensuring continued liquidity in the secondary mortgage market through meaningful housing finance reform, and enhancing the Low-Income Housing Tax Credit to promote the construction of sorely needed rental apartments must be part of any comprehensive affordable housing strategy," he said. "NAHB is also urging federal policymakers to adopt sensible workforce development and immigration policies that will help the residential construction industry fill open jobs."
Excessive regulations are also contributing to the housing affordability crisis. On average, regulations imposed by government at all levels account for nearly 25 percent of the price of building a single-family home and more than 30 percent of the cost of a typical multifamily development.
"Regulatory reform is important because it will help improve housing affordability by lowering development costs," said Lawson.
The NAHB/Wells Fargo Housing Opportunity Index shows that housing affordability in the single-family market is at a 10-year low. Only 56.6 percent of new and existing homes sold in the fourth quarter of 2018 were affordable to families earning the U.S. median income of $71,900.
"As a nation, we can and must do better," said Lawson. "NAHB stands ready to work with Democratic and Republican lawmakers to enact sensible solutions to boost the supply of affordable housing."
According to the National Association of Realtors, existing-home sales in the U.S. retreated in March 2019, following February's surge of sales. Each of the four major U.S. regions saw a drop-off in sales, with the Midwest enduring the largest decline last month.
The Mortgage Bankers Association is reporting in its Annual Mortgage Bankers Performance Report that Independent mortgage banks and mortgage subsidiaries of chartered U.S. banks made an average profit of $367 on each loan they originated in 2018, down from $711 per loan in 2017.
According to HUD, the U.S. national vacancy rate in the first quarter 2019 was 7.0 percent for rental housing and 1.4 percent for homeowner housing. The rental vacancy rate of 7.0 percent was virtually unchanged from the rate in the first quarter 2018.
According to a report from the U.S. Housing and Urban Development and Commerce Department, total housing starts fell 0.3 percent in March 2019 to a seasonally adjusted annual rate of 1.14 million units from a downwardly revised reading in February 2019.