|Rep. Tim Scott|
For the better part of the past year, House Republicans have been fighting against the current Administration’s regulatory onslaught, which affects millions of families nationwide.
In my hometown of North Charleston, S.C., we watched firsthand as the National Labor Relations Board sued the Boeing Corporation — our nation’s top exporter — for a hypothetical loss of jobs.
This bold attempt to protect the President’s union allies at the expense of American jobs was galling, especially at a time when unemployment in South Carolina was more than 10%.
While the NLRB case has been one of the most publicized examples of government overreach, the housing industry also knows all too well the power of burdensome and unnecessary government regulations.
The hard work put in by home builders not only allows many families the opportunity to realize the dream of owning a home, but is also an extremely important economic driver for our nation.
To emphasize that point, NAHB estimates three jobs are created for each new single-family home that is built.
Unfortunately, as a result of Dodd-Frank, multiple new burdensome regulations have been placed on the home building and mortgage industries.
Consequently, developers and builders are unable to complete projects because they can’t get a loan, and potential home buyers are not able to get a mortgage to purchase one.
To help shed light on this, the first stop on my regulations tour this past fall — designed to highlight how an overreaching federal government can affect every aspect of our lives — was an unfinished home.
When a developer can’t receive a loan because of unrealistic capital requirements now imposed on new acquisition, development and construction (AD&C) loans, they lose their ability not only to build, but to pay their workers.
I talked with one local home builder in my district who was turned down for a loan by 25 banks because of these new AD&C requirements.
This, in turn, leads to startling numbers — more than 1.4 million construction workers have been idled since 2006 in the housing industry alone, and 42% of the builders in the industry have gone out of business.
This is unacceptable — the government should be creating an environment conducive to growth, not one that kills jobs and small businesses.
Additionally, new mortgage requirements have made it harder for potential home buyers to buy.
One new requirement will force home buyers to make a downpayment equal to 20% of the selling price. If this regulation had been in effect in 2010, only 14% of home owners would have made enough of a downpayment to purchase their home.
While we all agree something needs to be done to safeguard against another housing bubble, creating mortgage limits so high that they are unattainable for many Americans is not the way do so.
My colleagues and I in the House have pushed to undo these harmful regulations. I have cosponsored two important pieces of legislation that will do so.
The Home Construction Lending Regulatory Improvement Act (HR 1755) eliminates the 100% capital requirement and uses market-based appraisals, rather than only “as completed” values.
HR 3461, the Financial Institutions Examination Fairness and Reform Act, addresses commercial loan concerns by restricting their ability to be classified as nonaccrual solely because the collateral value has deteriorated.
As we continue fighting against government overreach, the examples shown above are some of the key points to be made as to how harmful burdensome regulations can truly be.
We must give home builders, and all of our job creators, the stability and confidence to do what they do best — innovate and grow.