President Donald Trump signed an executive order Tuesday that establishes a White House Council tasked with identifying and removing barriers hindering the development of affordable housing.
In effect, he is “tearing down red tape in order to build more affordable housing,” a White House release said.
The council will comprise members of eight federal agencies and be chaired by Department of Housing and Urban Development Secretary Ben Carson. Its creation will “streamline interagency processes and deliver results even faster,” the White House said.
This will require the council to meet with state and local leaders to identify issues impeding the development of affordable housing, and to assess the impact of state, federal and local regulations on the cost of such development.
Among the specific issues the council will aim to tackle include ways to cut excessive costs in order to spur construction.
According to the White House, many of the markets that suffer the most from a lack of affordable housing have the most restrictive state and local regulations. More than a quarter of the cost of building a new home is a direct result of regulation, the White House said, and this is has slowed the pace of single-family and multifamily construction so that it cannot keep up with new household formations.
According to the Census Bureau, only seven homes were built for every 10 households formed from 2010 to 2016.
To address the problem, the council will make regulatory recommendations designed to spur the development of more affordable housing.
“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 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.”
The National Association of Home Builders applauded President Trump for making housing a top national priority.
"With housing affordability near a 10-year low, the president's executive order on this critical issue underscores that the White House is ready to take a leading role to help resolve the nation's affordability crisis," said NAHB Chairman Greg Ugalde. "Given that homeownership historically has been part of the American dream and a primary source of wealth for most American households, the need to tackle ongoing affordability concerns is especially urgent...NAHB will continue to work with the White House and Secretary Carson to find innovative solutions to increase the production of sorely needed quality, affordable housing."
The National Association of Realtors concurred.
“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,” said NAR President John Smaby. “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."