More than 900 business professionals engaged in all facets of residential construction trekked to Capitol Hill recently to call on Congress to ease the chronic headwinds that are fanning the nation’s housing affordability crisis and impeding builders from boosting housing production.
“Members of the housing community from across the nation have come to the nation’s capital for the National Association of Home Builders (NAHB) 2024 Legislative Conference to deliver a powerful message: ‘The only way to tame shelter inflation (homeownership and rental costs) and to ease the housing affordability crisis is to build more homes and apartments,’” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan.
There is currently a nationwide shortage of 1.5 million housing units and the lack of housing has surpassed an inflection point. NAHB has released a 10-point plan to help erase this shortfall and improve the business climate so that builders can increase the nation’s housing supply. Eliminating burdensome regulations, easing permitting roadblocks and overturning inefficient zoning rules are just a few elements of the plan that will move the ball forward.
In more than 250 individual meetings with their representatives and senators, housing advocates urged lawmakers to act on three key issues outlined in NAHB’s housing plan – adopt reasonable and cost-effective building codes, ease severe shortages of distribution transformers, and promote careers in the skilled trades — to help builders make homeownership and renting more affordable:
- Building codes. The U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture have rammed through a mandate that will require new single-family and multifamily construction financed through both agencies to be built to the 2021 International Energy Conservation Code (IECC) or ASHRAE 90.1-2019. This nationwide codes mandate will significantly raise housing costs – particularly in the price-sensitive entry-level market for starter homes and affordable rental properties – and limit access to mortgage financing while providing little benefit to new home buyers and renters.
Studies have shown that building to the 2021 IECC can add as much as $31,000 to the price of a new home and that it would require up to 90 years for a home buyer to realize a payback on the added upfront cost. That’s not a reasonable trade-off for a new home buyer.
Congress can reverse this ill-conceived policy that will exacerbate the housing affordability crisis by putting a provision in the fiscal year 2025 Transportation, Housing and Urban Development spending bill that will prevent HUD from using federal funds to implement this costly national codes mandate.
- Transformers. A shortage of distribution transformers is delaying housing projects across the nation and the cost of transformers has soared by more than 70% since the start of the pandemic. Wait times for distribution transformers often can take from 12 to 24 months.
Congress can help ease the severe shortage of distribution transformers by fixing supply chain disruptions and providing additional funding in the fiscal 2025 appropriations process specifically targeted at boosting the domestic manufacturing capacity to produce sorely needed distribution transformers. This will help home builders to construct more homes, satisfy unmet demand and ease America’s housing affordability crisis. - Workforce development funding. A severe shortage of labor in the construction industry is worsening the housing affordability crisis through higher home building costs and construction delays. In any given month, there is a shortage of roughly 400,000 construction workers, and home builders will need to add 2.2 million new workers over the next three years just to keep up with demand.
Congress can help ease this chronic workforce shortage by keeping Job Corps – which is a vital source of skilled labor for the housing industry – fully funded at $1.76 billion in the fiscal year 2025 Labor-HHS appropriations bill. Congress should also make meaningful investments in our nation’s education system to encourage students to pursue careers in the skilled trades.
Sen. Steve Daines (R-Mont.) and Rep. Chuck Edwards (R-N.C.) spoke to NAHB members before they conducted their Hill visits.
Daines noted that his parents started a home construction business in Bozeman more than 40 years ago. “This is such an important industry,” he stated. “You all deliver the American Dream, which is homeownership.”
He also pledged to work to extend the 2017 Tax Cuts and Jobs Act, which is set to expire at the end of 2025. “If you are a pass-through business, you can expect a 30% increase in your tax bill coming. We need to renew this law.”
Edwards said he entered politics because of the influence of government on small businesses, particularly excessive regulations. “Many of you have told me 25% of the cost of a new home is to satisfy needless regulations,” he said. “We’re playing a giant game of whack-a-mole. One rule comes up here and we work on it, and then another one pops out and another.”
Citing the severe shortage of labor in the construction industry, Edwards said “we need more folks in the skilled trades than going to a four-year college to study political science. An individual does not need a degree in welding, they need to know how to weld.”
See images at nahb.org.
