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Report Wants Regulations Eased to Encourage Affordable Housing

July 8, 1991

WASHINGTON (AP) _ Federal officials should be empowered to put a financial squeeze on local governments that lag in changing zoning laws and building codes that drive up housing costs, an advisory commission said today.

The panel appointed by Housing Secretary Jack Kemp also recommended relaxing a federal law that requires contractors to pay workers the local ″prevailing wage″ for their trades.

″We set a goal for the administration, one million new home owners by the year 1992,″ President Bush said at a ceremony at which he was presented with the report.

The president said that in order to have affordable housing, ″we’ve got to confront this problem of regulation and excessive red tape. ... These are obstacles that make it difficult to construct housing for low-income families.″

The report’s premise is that government regulations, zoning laws and unreasonable building codes are driving the cost of housing out of range for poor and moderate-income people.

The average cost increase caused by unnecessary regulation ″has been about 30 percent across the country,″ Kemp said on ABC’s ″Good Morning America.″

He added that ″according to the Census Bureau, about 60 percent of the American people have been frozen out of the opportunity for affordable housing, and that particularly is distressing to low and moderate income people as well as first-time home buyers.

Included with the report is a complicated chart with many boxes and dotted lines showing the steps a developer must go through to get the permits needed to build and occupy a building.

″In community after community across the country, local governments employ zoning and subdivision ordinances, building codes, and permitting procedures to prevent development of affordable housing,″ the report said. ″They fear that affordable housing will result in lower land values, more congested streets and a rising need for new infrastructure such as schools.″

In all, the commission made 31 recommendations for removing government- caused barriers to affordable housing.

The first one on the list is to have Congress amend the National Affordable Housing Act of 1990 to give the Department of Housing and Urban Development the power to withhold money from state and local governments that it decides aren’t removing these barriers.

But Dan Mandelker, a professor of land use law at Washington University in St. Louis, said the report is a more of a political attack on the system than a practical guide to reforming it.

The Advisory Commission on Regulatory Barriers to Affordable Housing was headed by former New Jersey Gov. Thomas Kean, a Republican, and was filled largely with other GOP aides, as well as people representing the interests of banks, developers and builders.

″The recommendations, some of them, are very good,″ said Mandelker, a self-described liberal Democrat who will testify before a House subcommittee on this issue next week. ″But the trouble is that since the report is an outright attack on the system, you’re left wondering what should be done.″

And besides, Mandelker said, the report doesn’t address the big-ticket expenses that really drive the cost of housing: materials, labor and financing.

He called the proposal to withhold HUD money from uncooperative localities ″the major red flag.″

Among the commission’s other recommendations is a proposal to change the Davis-Bacon Act, that now requires contractors on federally financed projects to pay the local prevailing wage to their employees if the project’s cost is above $2,000. The commission wants to raise that limit to $250,000.

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