U.S. President Donald Trump is turning his attention to the affordable housing problem. He’s just signed an executive order to setup a “White House Council” that will be tasked with “identifying and removing barriers hindering the development of affordable housing”, HousingWire reported.
What that means is the president is trying to “tear down the red tape” that prevents developers from building more affordable homes, the White House said in a press release.
The proposed council will be headed by Department of Housing and Urban Development Secretary Ben Carson, and include officials from eight federal agencies, HousingWire added. The hope is that the council can “streamline inter-agency processes and deliver results even faster”.
The council intends to meet with both local and state leaders across the country to try and identify problems that are preventing more affordable homes from getting built. This will include assessing the impact of local, state and federal regulations on the costs of housing development.
The council will also attempt to find ways to cut construction costs in order to incentivize more development.
White House chiefs said in a statement they believe one of the main reasons for the lack of affordable homes in some markets is due to “restrictive state and local regulations”. Around a quarter of the cost of building a new home is due to such regulations, and this has led to reduced construction of single-family and multifamily homes, the White House said.
Census Bureau seems to back up those claims, with just seven homes built for every 10 households formed during 2010 to 2016.
“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,” Carson said. “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.”
Important industry bodies including the National Association of Realtors applauded Trump’s move.
“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,” NAR President John Smaby said in a statement. “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."