President Donald Trump signed two executive orders that aim to cut red tape on housing development and mortgage lending.
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The first policy directive calls on federal agencies to reduce regulatory burdens that the White House says are holding back development, including rules around energy efficiency and permitting. The second executive order aims to make it easier for community banks and other small lenders to underwrite more mortgages.
“Layers of unnecessary regulatory barriers, slow permitting processes, and onerous mandates at all levels of government have delayed construction, restricted development, and driven up the costs of new housing,” the construction-related order says. “These constraints have made housing less affordable for many Americans.”
The executive orders are the latest policy directives in a push from a White House that has become increasingly tuned in to voters’ discontent over rising prices and housing costs.
Congress is also pushing through a massive housing reform package that has raised the hackles of the build-to-rent and single-family rental business, a segment of the commercial real estate sector that Trump has pointed to as a cause of high housing costs and pushed to rein in as part of another executive order in January.
The latest order aimed at housing development, published by the White House on Friday, calls on the Environmental Protection Agency and the Army to “review and revise stormwater, wetlands, and other water-related permitting requirements to reduce building and ownership costs, streamline Federal regulatory approvals, and increase home insurability.”
It calls on federal housing agencies to eliminate burdensome regulations around energy and water efficiency and sets in motion the creation of guidance and incentives for state and local governments to streamline development approvals and permitting.
The White House is calling on municipalities to curtail green building requirements it says create costly design mandates. Regulations across all levels of government added $90K to the final price of a new single-family home, a press release distributed with the executive order says.
The second executive order calls for the elimination of regulations for banks with less than $30B in assets, including some passed in the Dodd-Frank reform package in the wake of the 2008 Global Financial Crisis.
The 21st Century Road to Housing Act passed the Senate in an 89-10 vote this month and is back in front of the House of Representatives. Speaker of the House Mike Johnson has signaled that the House could force the bill into conference before it advances to the president’s desk.
A piece of the legislation that would force build-to-rent operators to sell homes within seven-years of development or purchase is among several policies in flux, Politico reported.
The housing-focused executive order doesn’t make any mention of housing density and makes no recommendation for parking requirements or restrictive single-family zoning, two policy points where housing advocates have long pushed for reform.
It’s also unclear how the White House order for mortgage policy will unlock homeownership for more buyers. Reductions in red tape would make it easier for small banks to lend, but mortgage rates move with U.S. Treasury Bonds, and the cost of debt remains significantly higher than just five years earlier.
The average 30-year mortgage rate was 6.05% in February, down from 6.84% the prior year, according to the National Association of Realtors. The average 30-year rate bottomed out this cycle just under 3% in 2021.
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