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Governors Urged to Take the Lead on Housing Affordability
Participating in a Sept. 21 housing panel discussion hosted by the Republican Governors Association in Las Vegas, NAHB President-elect Brian Catalde warned the governors to avoid following in the footsteps of California, whose excessive regulatory constraints have put a stranglehold on housing affordability in the state.
He also advised the governors not to get too caught up in the media hype on the hosuing market slowdown.
Governors Kenny Guinn from Nevada, Bill Owens from Colorado and Rick Perry from Texas, and gubernatorial candidates Rep. Bob Beauprez from Colorado and Rep. Jim Gibbons from Nevada listened to Catalde address the current state of the housing market, infrastructure financing alternatives, storm water regulations and regulatory barriers to affordable housing. Kathy Weiss, director of government affairs for Centex Homes, also addressed the governors.
As a developer in California, Catalde said he knows all too well how regulations are adding to home building costs.
“In my home state, it can take three to four years to get the entitlements you need to develop land for new homes,” he said. “Add the carrying costs of such parcels to the impact fees, concessions and severe restrictions on land use that we frequently encounter, and you easily understand why California has the costliest housing market of any state.”
The availability of developable lots has shrunk considerably as a result of the restrictions, he said, and the cost of land alone now constitutes a huge portion — 35% or more — of any new home in the state, he said.
Catalde said that it will take “real political will” to solve the problem, and he said that both Republican and Democratic governors can take the lead on the land-use issue, which is really a matter of providing workers with housing they can afford in neighborhoods that are close to their jobs.
Catalde provided the governors with copies of “Building for Tomorrow,” an NAHB publication that describes infrastructure financing alternatives that will enable communities to accommodate their housing needs.
On the nation’s cooling housing marketplace, Catalde noted that, “Some of the recent media reports are short on facts and long on wild-eyed speculation. To hear them tell it, the sky is falling and there’s nothing anyone can do about it. The fact is, the media always over-hypes the market on the way up and then exaggerates the doom and gloom on the way down.”
Catalde said that the record pace of sales and construction activity over the past four years, and annual price appreciation of 20% or more in some markets, was “unsustainable” and “bound to decline.”
“It is not, however, the end of the world,” Catalde said. Although it will be painful for builders and sellers in certain markets, he said, the extent of the decline in activity won’t be nearly as great as in the slowdowns of the early 1980s and 1990s, when starts and sales fell by more than 50%.
For more information, e-mail Alex Strong at NAHB, or call him at 800-368-5242 x8279.
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