NAHB Testifies on Federal “Red Tape”

Barry Rutenberg, Chairman of the National Association of Home Builders (NAHB) was among witnesses appearing today before a hearing of the House Committee on Oversight and Government Reform entitled Continuing Oversight of Regulatory Impediments to Job Creation: Job Creators Still Buried by Red Tape.

Rutenberg told committee members that an unwieldy federal regulatory process is hampering the housing and economic recovery.  “Housing serves as a great example of an industry that would benefit from smarter and more sensible regulation,” he said.  He cited regulations being developed under Dodd-Frank’s qualified mortgage and “ability to pay” provisions as rules which will define the mortgage market for years to come. “For that reason, NAHB supports regulatory changes aimed at more rational lending practices, greater lender accountability and improved borrower safeguards.

“However, it is critical that such reforms are implemented in a manner that causes minimum disruption to the mortgage lending process. New reforms should not limit consumer financing options, increase the cost of financing or reduce the availability of mortgage credit.”

Another key factor in housing’s current depressed state has been an ongoing lack of acquisition, development and construction lending.  This has led, he said, to NAHB members being caught in an ‘argument’ between banks and federal regulators, who take turns pointing fingers at one another when builders try to determine who is to blame for the serious lack of lending to the construction sector.  Regardless of who is at fault, with many housing markets now showing signs of recovery, it is essential that Congress works with regulators and financial institutions to encourage banks to provide sound construction loans so that builders can construct viable home building projects in communities across the land that want and need them.

Rutenberg also pointed to changes in the Environmental Protection Agency’s Lead: Renovation, Repair and Painting (RRP) rule which he said have constrained small businesses in the home building and remodeling industry. The rule requires renovation work that disturbs more than six square feet in a home built before 1978 to follow new lead-safe work practices supervised by an EPA-certified renovator and performed by an EPA-certified renovation firm.  He charged that this has resulted in excessive compliance costs and hindered job growth and energy efficiency upgrades.

Also appearing before the hearing were representatives of Vision Bank, the Agricultural Retailers Association, the American Chemistry Council, and the American Road & Transportation Builders Association.

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