Knocking Down Barriers to Affordable Housing; HUD Is Waging an Aggressive Campaign against Regulatory Barriers That Prevent the Construction of More Affordable Housing. the Agency Is Taking the Battle to the Local, State and Federal Levels in the Hopes of Making Real Headway

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OUTGOING SECRETARY MEL MARTINEZ HAS MADE REGULATORY reform a top priority during his tenure as the nation's 12th Secretary of Housing and Urban Development (HUD). As county chairman in Orange County, Florida, Martinez saw firsthand the toll these barriers took on the production and supply of decent, affordable housing in his community. And as secretary of HUD, he has witnessed these same problems across America. * Acting HUD Secretary Alphonso Jackson is committed to this effort as well, working with states and local communities to break down regulatory barriers and to increase the supply of decent affordable housing. And we are seeing results. * In fiscal year 2002 alone, the Federal Housing Administration (FHA) insured more than 95,000 mortgages for newly built homes, a 39 percent increase over the previous year. And we are happy to say that the trend continued in fiscal year 2003, as we have seen an 11 percent increase (to more than 106,000 new mortgages) over the previous fiscal year. Further, the percentage of new-construction mortgages that FHA insures compared with all the home purchases it insures reached 17.7 percent in fiscal year 2003, compared with 9.4 percent in fiscal year 2001, before HUD changed its new-construction requirements. * Many industry leaders, including Debra W. Still, executive vice president of Pulte Mortgage LLC, Englewood, Colorado, have applauded these efforts at HUD:

"Our growth in first-time homebuyers is in large part attributable to HUD's actions around reducing regulatory barriers to new production. When FHA did away with PUD [planned unit development] approvals and changed its policies to allow for inspections by local governments, this sped up the lending process and allowed for more new-construction houses to be eligible for FHA financing," says Still.

"The recent elimination of the paper requirement for FHA mortgage insurance and the technology advances for automated underwriting make us bullish on continued growth in the first-time homebuyer market," she adds.

At HUD, we believe that increasing the production and availability of affordable housing for all Americans is important to the national economy and to the economic prosperity of every family. Expanding the supply of affordable housing stands at the very core of our mission, and is a priority for President Bush and his administration.

However, we realize the affordability issue is complex and fraught with competing interests. A solution that works in one community will not necessarily make housing more affordable in every community. This is true because the problem is often rooted in decisions made on the local level. But the federal government can help--and our administration is taking action.

Steps already under way

To focus attention on the need for regulatory reform, Martinez launched the America's Affordable Communities initiative--a departmentwide effort to help communities across America identify and overcome regulatory barriers that impede the availability of affordable housing. At HUD, we see overcoming barriers to housing affordability as a strategy intended to complement, not substitute for, our other efforts to boost the availability of affordable housing in this country. In fact, the removal of regulatory barriers is a necessary component of any national housing policy and an administration priority.

To lead the initiative, Martinez tapped A. Bryant Applegate, HUD senior counsel and a former city and county attorney with considerable experience on regulatory and zoning issues at the local level. Applegate, who reports directly to Jackson, has been charged with identifying key partners and constituencies, compiling a database of regulatory barriers and mapping out a strategy for helping communities reduce and eventually eliminate unnecessary barriers to housing.

Applegate quickly assembled a team of senior staff from within HUD to meet weekly and identify ways to overcome unnecessary regulatory barriers. …