HUD's regulations and guidance documents “reinforce an interpretation of disparate impact that conflicts with recent Supreme Court precedent and creates uncertainty for housing providers,” Bibby and Pinnegar write. They add that HUD has asserted new criteria for familial status and occupancy compliance that are “contrary to long-held practices.”

Bank regulations, introduced under Dodd-Frank and Basel III, have also made an impact on apartment owners by constraining the supply of capital, according to the NMHC/NAA letter. Among these are Basel III's high volatility commercial real estate standards, which Bibby and Pinnegar say made an impact on the availability of construction financing in 2016. Another roadblock is thrown up by Community Reinvestment Act rules whose lack of clarity leads banks to be “highly conservative” in determining what is eligible, “thereby reducing the availability of loans to borrowers in areas that do not qualify for CRA credit.”

Not yet on the books is a HUD regulation that would require every FHA multifamily loan to track and submit energy benchmarking data through the Energy Star Portfolio Manager. The proposed regulation, write Bibby and Pinnegar, would create “an administrative burden for owners and drive up their servicing costs. In many cases the information is not available and owners could be restricted from borrowing from HUD” if the data are not reported.

“We believe that regulations must have demonstrable benefits that justify the cost of compliance and that federal agencies should be aware that broad-stroke regulations often have disproportionate effects on industries that serve as key drivers of our economy,” Bibby and Pinnegar write. In a statement, NMHC and NAA express encouragement over Trump's “recent comments during his address to a joint session of Congress, as well as the executive orders he has already signed, suggesting that “the administration understands the risks posed by an overly burdensome regulatory environment.” Click here for the complete letter.

WASHINGTON, DC—The apartment industry is calling on the Trump administration to stem some of the “flood” of federal regulations that can make multifamily development less economically feasible. In a letter to President Trump, Vice President Pence and other federal officials, the National Multifamily Housing Council and National Apartment Association cited rules covering everything from energy use to construction lending and asked the administration to reform or rescind them.

“The multifamily sector is under increasing pressure to meet booming demand across the country,” according to a letter above the signatures of NMHC president Doug Bibby and NAA president and CEO Robert Pinnegar. “Experts believe this trend will continue, if not increase, due to a host of factors including demographic change and evolving consumer preferences.”

Against this backdrop of demand, Bibby and Pinnegar write, “our industry, and particularly apartment owners and developers, must balance a wide array of concerns regarding project viability, regulatory cost and compliance at all levels of government. While many regulatory hurdles and costs, such as impact fees, continual environmental reviews and antiquated zoning processes, are within the purview of state and local policymakers, there are a wide array of existing federal regulations that contribute to making housing less economically feasible to develop.”

A fair number of these existing rules fall under the heading of HUD's Fair Housing Act regime, including regulations related to disparate impact, resident criminal history screening and limited English proficiency, among other areas. “During the Obama Administration, HUD actively expanded fair housing compliance and enforcement efforts,” write Bibby and Pinnegar.

HUD's regulations and guidance documents “reinforce an interpretation of disparate impact that conflicts with recent Supreme Court precedent and creates uncertainty for housing providers,” Bibby and Pinnegar write. They add that HUD has asserted new criteria for familial status and occupancy compliance that are “contrary to long-held practices.”

Bank regulations, introduced under Dodd-Frank and Basel III, have also made an impact on apartment owners by constraining the supply of capital, according to the NMHC/NAA letter. Among these are Basel III's high volatility commercial real estate standards, which Bibby and Pinnegar say made an impact on the availability of construction financing in 2016. Another roadblock is thrown up by Community Reinvestment Act rules whose lack of clarity leads banks to be “highly conservative” in determining what is eligible, “thereby reducing the availability of loans to borrowers in areas that do not qualify for CRA credit.”

Not yet on the books is a HUD regulation that would require every FHA multifamily loan to track and submit energy benchmarking data through the Energy Star Portfolio Manager. The proposed regulation, write Bibby and Pinnegar, would create “an administrative burden for owners and drive up their servicing costs. In many cases the information is not available and owners could be restricted from borrowing from HUD” if the data are not reported.

“We believe that regulations must have demonstrable benefits that justify the cost of compliance and that federal agencies should be aware that broad-stroke regulations often have disproportionate effects on industries that serve as key drivers of our economy,” Bibby and Pinnegar write. In a statement, NMHC and NAA express encouragement over Trump's “recent comments during his address to a joint session of Congress, as well as the executive orders he has already signed, suggesting that “the administration understands the risks posed by an overly burdensome regulatory environment.” Click here for the complete letter.