NAHB shares housing concerns
This week, the National Association of Home Builders (NAHB) shared concerns with Congress regarding the country's ongoing housing shortage and spiraling homebuilding costs.
Testifying before the House Financial Services Subcommittee on Housing and Insurance, NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, N.C., said the “United States is facing a fever-pitched housing affordability crisis. Nearly 77% of U.S. households cannot afford a median-priced new home.”
Highlighting key causes of the crunch, Hughes points out the country's shortfall of 1.5 million housing units, as well as swelling construction costs that are "rising at an unsustainable rate." Uncertainty about tariffs—which have been delayed until April for now—has heaped additional pricing and planning pressure onto builders. In a statement reacting to the postponed tariffs, Hughes shared:
“NAHB commends President Trump for providing a one-month tariff delay on all products from Mexico and Canada that are covered by the United States-Mexico-Canada Agreement, including Canadian softwood lumber. Likewise, the president’s recent executive order seeking to increase domestic timber production was an important step forward to make America more self-sufficient and help builders to meet our nation’s housing needs. As we enter the spring home building season, NAHB remains concerned that the continued threat of tariffs will make it harder for builders and their customers to move ahead with new construction projects. With the nation facing a housing affordability crisis, we continue to believe that critical construction materials should be exempt from any future tariffs. NAHB will continue to work with the administration to cut regulations, boost domestic lumber output and further rein in housing costs so that builders can construct more homes and apartments to meet our nation’s housing needs.”
Before Congress, Hughes said the headwinds placing pressure on builders can be boiled down to the “5 L's” of lending, labor, lumber, lots and laws. Each of these factors contributes to the rising cost in new homes, Hughes said, who went on to share the the following facts:
- Credit is tightening for development and construction loans, and builders also rely on several federal programs administered by federal agencies to help them supply new homes and apartments.
- The construction sector faces a persistent labor shortage, with more than 200,000 unfilled industry jobs.
- Due primarily to supply chain disruptions, construction material costs are up 34% since December 2020, resulting in higher rents and home prices.
- Low lot supplies are due in large part to tighter rules regarding land use and zoning for housing and land development.
- Regulatory costs account for about a quarter of the purchase price of a new single-family home and even more for apartment buildings due to construction delay costs and zoning issues. These regulatory burdens have made it very difficult to build entry-level housing for first-time home buyers.
To address these issues, Hughes called on Congress to take the following actions:
- Preserve and strengthen key federal programs including the Low-Income Housing Tax Credit, the Department of Housing and Urban Development (HUD) Section 8 housing voucher programs, and HUD’s HOME Investment Partnership and Community Development Block Grant programs.
- Support workforce development programs like Job Corps and pass the CONSTRUCTS Act, which is legislation pending in both chambers of Congress that will help prepare young adults for careers in construction and other trades.
- Responsibly boost the domestic supply of lumber, and call on the Trump administration to negotiate a long-term softwood lumber agreement with Canada that will end lumber tariffs, help stabilize the volatile market and give builders greater price stability.
- Pass the Identifying Regulatory Barriers to Housing Supply Act, which will reduce minimum lot size requirements and allow more density on single-family zoned areas.
- Rein in excessive regulatory costs and reassert congressional authority over federal agencies’ rulemaking agendas. Lawmakers should also amend the Energy Independence and Security Act to clarify that HUD and the U.S. Department of Agriculture are not required to continue updating energy standards for related housing programs.
