Rep. Tim Scott, a Republican member of Congress from Charleston and Chairman of the freshman caucus, penned an opinion article in this week’s issue of Nation’s Building News, the official publication of NAHB. His op ed is reprinted below.
|Rep. Tim Scott|
It’s Time to Let Home Builders Create Jobs, Innovate and Grow
For the better part of the past year, House Republicans have been fighting against the current Administration’s regulatory onslaught, which affects millions of families nationwide.
In my hometown of North Charleston, S.C., we watched firsthand as the National Labor Relations Board sued the Boeing Corporation — our nation’s top exporter — for a hypothetical loss of jobs.
This bold attempt to protect the President’s union allies at the expense of American jobs was galling, especially at a time when unemployment in South Carolina was more than 10%.
While the NLRB case has been one of the most publicized examples of government overreach, the housing industry also knows all too well the power of burdensome and unnecessary government regulations.
The hard work put in by home builders not only allows many families the opportunity to realize the dream of owning a home, but is also an extremely important economic driver for our nation.
To emphasize that point, NAHB estimates three jobs are created for each new single-family home that is built.
Unfortunately, as a result of Dodd-Frank, multiple new burdensome regulations have been placed on the home building and mortgage industries.
Consequently, developers and builders are unable to complete projects because they can’t get a loan, and potential home buyers are not able to get a mortgage to purchase one.
To help shed light on this, the first stop on my regulations tour this past fall — designed to highlight how an overreaching federal government can affect every aspect of our lives — was an unfinished home.
When a developer can’t receive a loan because of unrealistic capital requirements now imposed on new acquisition, development and construction (AD&C) loans, they lose their ability not only to build, but to pay their workers.
I talked with one local home builder in my district who was turned down for a loan by 25 banks because of these new AD&C requirements.
This, in turn, leads to startling numbers — more than 1.4 million construction workers have been idled since 2006 in the housing industry alone, and 42% of the builders in the industry have gone out of business.
This is unacceptable — the government should be creating an environment conducive to growth, not one that kills jobs and small businesses.
Additionally, new mortgage requirements have made it harder for potential home buyers to buy.
One new requirement will force home buyers to make a downpayment equal to 20% of the selling price. If this regulation had been in effect in 2010, only 14% of home owners would have made enough of a downpayment to purchase their home.
While we all agree something needs to be done to safeguard against another housing bubble, creating mortgage limits so high that they are unattainable for many Americans is not the way do so.
My colleagues and I in the House have pushed to undo these harmful regulations. I have cosponsored two important pieces of legislation that will do so.
The Home Construction Lending Regulatory Improvement Act (HR 1755) eliminates the 100% capital requirement and uses market-based appraisals, rather than only “as completed” values.
HR 3461, the Financial Institutions Examination Fairness and Reform Act, addresses commercial loan concerns by restricting their ability to be classified as nonaccrual solely because the collateral value has deteriorated.
As we continue fighting against government overreach, the examples shown above are some of the key points to be made as to how harmful burdensome regulations can truly be.
We must give home builders, and all of our job creators, the stability and confidence to do what they do best — innovate and grow.
The Environmental Protection Agency is relying on tips and has begun stepping up its inspections and enforcement of the Lead: Renovation, Repair & Painting (RRP) rule, an associate director with the EPA’s Office of Enforcement and Compliance Assurance said at a free webinar hosted by the NAHB Remodelers on Dec. 14.
While only three lead-paint rule enforcement actions were taken during fiscal 2011, the EPA’s Don Lott said 2012 will be much busier. He noted that the agency already has conducted 1,000 compliance inspections, with more to follow.
Results of a major NAHB-commissioned survey clearly show the high priority that Americans continue to place on homeownership and housing choice, even amidst the turmoil in today’s housing market.
The survey, which polled 2,000 likely 2012 voters during the week of May 3-9, was conducted by two of the most highly regarded polling firms in the country. Initial findings were officially released in an NAHB media teleconference that was held on June 7, with further details set for release within the next few days — in fact, a special edition of Nation’s Building News to be published on Tuesday, June 14, will contain details from the full array of findings.
The bottom line is this: Americans see beyond the immediate housing market to the enduring value of homeownership, with an overwhelming 75% of those surveyed saying that owning a home is worth the risk of the fluctuations in the market and 95% of current home owners saying they are happy with their decision to purchase a home. Meanwhile, almost three-quarters of those who do not currently own a home said that homeownership is one of their goals. And among younger voters who are most likely to be in the market for a home in the next few years, the percentages are even higher.
Among the other survey results:
- Homeownership and a retirement savings program are considered by voters to be their best investments.
- 80% of home owners would advise a close friend or family member just starting out to buy a home.
- Saving for a downpayment and closing costs is the biggest barrier to homeownership.
- Americans believe that owning their own home is as important as being successful at their job or being able to pay for a family member’s education.
These are powerful findings that confirm just how out of touch some policymakers in Washington have become with the American public in their pursuit of measures that would make it much more difficult for the average consumer to purchase a home. And, they are exactly what we need to counter these measures in the halls of Congress, in the Administration and in the media.
Stay tuned for further details in this report, Nation’s Building News, and other communications channels. In the meantime, read the NAHB press release, check out the survey results for yourself at www.nahb.org/VoterPoll, and view favorable coverage of our poll by Charlie Cook in the National Journal and on The Wall Street Journal’s blog.
To listen to the presentation of the survey by the pollsters at NAHB.org, click here.
“The decline in new construction and permits in February is the culmination of a great deal of nervousness that both builders and consumers are feeling right now,” said NAHB Chairman Bob Nielsen.
“In an already fragile market where credit for building and buying homes remains extremely tight, additional concerns about energy costs, interest rates and other factors are contributing to an atmosphere in which many have adopted a very cautious stance,” Nielsen said.
Read the entire article at Nations Building News by clicking here.
A flurry of recently issued storm water and regulatory requirements that give new muscle to the U.S. Environmental Protection Agency — with more regulations on the way — are likely to make 2011 a difficult year for home builders and developers as they struggle to rebound from the deepest housing recession in more than 70 years, according to a report by NAHB.
The EPA is also expected to re-propose a revised numeric limit to its Construction and Development Effluent Limitation Guidelines Rule (ELGs) early this year.
Read the entire article at Nations Building News by clicking here.