HUD No. 07-088
June 20, 2007
BERNARDI CALLS ON COMMUNITIES IN SOUTHEAST TO CUT RED TAPE STRANGLING WORKFORCE HOUSING
More than 150 communities and organizations sign on to reduce regulatory barriers
LOUISVILLE, KY - U.S. Housing and Urban Development Deputy Secretary Roy A. Bernardi today urged more than 100 state and local officials meeting in Louisville to cut excessive or unnecessary regulations that significantly increases the cost of housing for working families. During a conference on workforce housing, Bernardi issued HUD's National Call to Action for Affordable Housing Through Regulatory Reform, an appeal designed to reduce or eliminate unnecessary regulations that price housing beyond the reach of millions of Americans. To date, The City of Bowling Green, Habitat for Humanity of Metro Louisville, and the Louisville Metropolitan Housing Coalition have all signed onto HUD's "Call to Action."
"Red tape is literally choking the life out of housing that's affordable to working families," said Bernardi. "Today, HUD is calling on local communities to join us as we identify and remove these man-made barriers that prevent teachers, police officers, firefighters and others from living in communities of their choice."
In 1991, HUD released a landmark report, Not in My Back Yard, which found exclusionary, discriminatory or unnecessary regulations pose a serious barrier to the production of affordable housing. In 2005, HUD published a comprehensive follow-up study, Why Not in Our Community?, that found NIMBYism is still a problem in many communities. HUD's latest report concluded that removing these affordable housing barriers could reduce development costs by up to 35 percent, creating millions of homes that hard-working American families could afford to buy or rent.
Numerous recent studies have also demonstrated how certain barriers can impact the production of workforce housing. For example:
- Excessive regulations increase the average cost of a single-family home built in subdivisions by $12,000. Nationally, these unnecessary regulations total approximately $15 billion.
- One community required builders to provide 4.5 parking spaces per home, effectively banning multi-family and senior housing developments.
- It is no longer unusual that communities require at least five years to gain all necessary permits and approvals, significantly raising the costs of development.
- In a number of California communities, impact fees alone can exceed $45,000 per home.
- In 42 metropolitan areas, eliminating unnecessary regulations, fees and delays could reduce housing costs by an average of ten percent.
There are a number of trends in today's housing market. For example, complex environmental and other regulations can significantly increase the length and cost of home building review and approval processes, in some cases by more than five years. "Smart growth" principles can also be misused as a pretext to justify restricting available land that could otherwise be developed into workforce housing. Obsolete building and rehabilitation codes may not consider modern building materials or methods that can substantial lower construction or rehab costs.
What is a regulatory barrier?
Barriers are public statutes, ordinances, regulations, fees, processes and procedures that significantly restrict the development of affordable housing without providing a commensurate health or safety benefit. These barriers can effectively exclude working individuals such as teachers, police officers, firefighters, veterans or nurses from living in the communities where they work. In addition, senior citizens often find it impossible to locate suitable homes or apartments near their adult children or young families may not be able to find a home in the communities where they were raised.
Changing the mindset
More than 15 years after the publication of "Not in My Backyard," the regulatory climate is changing in many parts of America. "Why Not in Our Community?" found that many jurisdictions are reducing regulatory barriers to affordable housing, particularly in areas where the supply of affordable housing is increasingly scarce. For example, Idaho enacted a state law requiring municipalities to permit manufactured homes to be located in residential neighborhoods. Florida created a statewide one-stop permitting system to significantly speed up the homebuilding process. Minnesota created tax incentives to encourage the preservation and creation of affordable housing. New Jersey adopted a new housing rehabilitation code that reduced costs by 25 percent, significantly increasing rehab activity.
What's HUD doing to reduce barriers?
HUD is reviewing all the federal regulations in the Department's program areas to determine if there are any unnecessary, duplicative or obsolete barriers. For the first time in the Department's history, all proposed regulations now must be reviewed for their potential impact on affordable housing before taking effect.
In an effort to spark a national dialogue on the issue of barrier reduction, HUD launched America's Affordable Communities Initiative in 2003. Among the Department's highest priorities, this initiative is designed to help communities across America identify and overcome regulatory barriers that impede the availability of affordable housing. Barrier reduction is also a central part of President Bush's strategy for increasing the supply of affordable housing by seven million over the next 10 years. More information about America's Affordable Communities Initiative.