Sen. Moran Introduces Legislation to Increase Access to Affordable Housing

WASHINGTON - U.S. Senator Jerry Moran (R-Kan.) reintroduced the Affordable Housing Expansion Act, legislation that would help address the shortage of affordable housing options by making targeted reforms to requirements under the Davis-Bacon Act, a 1930s-era labor law. These reforms would reduce labor costs and administrative burdens on residential construction contractors, which would free up capital that could be redirected toward building additional affordable housing.

"Buying a home is a part of the American dream that is currently out of reach for many families," said Sen. Moran. "Reducing the burden of federal regulations will help homebuilders meet the demand for new homes, making homeownership a reality for more Kansans."

"The Davis-Bacon Act creates overly burdensome contractor mandates on federal assisted projects, by setting wage requirements that misrepresent real wages being paid in any given county," said Wess Galyon, President Emeritus of the Wichita Area Builders Association. "The current rules result in higher direct labor costs on projects, and indirect costs related to administrative compliance and reporting. In addition to discouraging the promotion of affordable housing projects, these costs ultimately get passed on and drive housing affordability in the wrong direction. Reducing these burdens will make housing more attainable for more Americans, and we applaud Senator Moran for introducing this legislation."

"NAHB commends Senator Moran for introducing this bill, which will help lower housing costs by streamlining and modernizing Davis-Bacon prevailing wage requirements," said Buddy Hughes, Chairman of the National Association of Home Builders (NAHB). "A Berkley study found that prevailing wage requirements raise construction costs by more than $30 per square foot. This means that current Davis-Bacon requirements are increasing construction costs by an at least $27,000 for an average 900 square foot apartment, which ultimately translates into higher rents. To solve the housing affordability crisis affecting our communities, Congress needs to look at all the factors driving up housing costs. The nation's home builders strongly support this legislation."

"The Mortgage Bankers Association commends Senator Moran for once again taking action to improve and encourage access to quality affordable housing," said Bill Killmer, Senior Vice President of Legislative and Political Affairs of the Mortgage Bankers Association (MBA). "The improper application of Davis-Bacon wage rates is an unnecessary barrier to the modernization and development of multifamily housing, and this bill will help reduce the administrative burden and complexity for residential housing projects. MBA will continue to advocate on behalf of policies that both ensure a healthy real estate market and provide consumers with sustainable housing choices."

"The Affordable Housing Expansion Act removes unnecessary barriers to construction and improves taxpayer value," said Kristen Swearingen, Vice President of Government Affairs of Associated Builders and Contractors (ABC). "By modernizing the Davis-Bacon wage determination process and reducing compliance burdens, this bill provides contractors, workers and taxpayers with accurate and clearly defined rates. ABC commends Sen. Moran for his leadership and urges Congress to advance this commonsense proposal."

Background:

• Enacted in 1931, the Davis-Bacon Act requires construction contractors involved in certain federally funded or federally assisted construction contracts, like those participating in various federal housing programs, to pay individuals working on the contract at least the prevailing wages of the vicinity in which the construction project is located.
• As it stands, the Davis-Bacon Act can disincentivize the construction of affordable housing due to the high costs it places on construction contractors and the administrative burden that accompanies it.
• The U.S. Department of Labor sets these prevailing wage rates by reviewing data submitted by construction contractors through voluntary surveys, which can be, at times, inaccurate or inconsistent.
  
  

Full text of the legislation can be found here.

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