Much of the policy press last week followed the Senate’s passage of the ROAD to Housing Act, which supporters claim will reduce housing costs. Yet last Friday, to little media fanfare, President Trump issued an executive order on “Removing Regulatory Barriers to Affordable Home Construction” that will do far more to bring down costs.
Indeed, Friday’s order is one of the more important federal housing actions ever undertaken. That’s because it focuses on solving problems caused by the federal government itself. Though hardly a panacea, it is an important step toward addressing the nation’s housing supply crisis.
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For decades, housing wonks have been frustrated that most barriers to housing are at the state and local level. That limits how much federal lawmakers can do. The ROAD to Housing Act, for instance, tries to solve the housing crisis through a litany of new reports (the act uses some variation of the word “report” almost 100 times), grants to state and local governments, and new federal regulations—which, on the whole, will probably make housing more expensive.
Yet, though they often go ignored, there are distinct federal burdens on housing. Trump’s executive order tackles them head-on.
The most substantial of these burdens comes from the Clean Water Act. As I detailed in a Manhattan Institute report last month, the federal government has used the act to impose stormwater control mandates on almost all large construction sites and finished building projects. Covered developers must do everything from completing extensive reports on stormwater management to building “bioretention ponds.” These mandates can add tens of thousands of dollars to the cost of an individual house, while producing little benefit for the nation’s lakes and rivers.
Washington has also used the Clean Water Act to stop development in areas the federal government considers “wetlands”—including some patches of damp ground. It can take months for the government even to tell builders if they’re building on a wetland.
In response to all of this, the new executive order requires agencies to streamline and simplify all major Clean Water Act regulations that might increase costs for builders. This should significantly reduce the burden on builders of big projects.
Another federal barrier is the National Environmental Policy Act. NEPA is famous for requiring mammoth reports on new infrastructure projects. Trump’s executive order directs executive agencies to simplify and minimize NEPA regulations in any way connected to residential building, including infrastructure projects that facilitate new housing.
The order also takes on the extensive reporting mandates in Section 106 of the National Historic Preservation Act. Though less famous than NEPA, the act is known in some circles as the “Archaeologist Full Employment Act,” as it requires extended archeological digs and reports on new infrastructure projects. Just as with NEPA, Trump’s order requires that departments minimize the reporting burden under Section 106.
As part of the Biden administration’s efforts to fight climate change, the federal government imposed increasingly stringent energy-efficient building codes on homebuilders. Biden officials claimed the codes led to energy savings, but they knew that the mandates added thousands of dollars to the cost of new mobile homes and even more to the cost of regular housing. The Trump executive order requires executive branch agencies to eliminate these building-code mandates as much as possible.
These federal rules are not the main drivers of high housing costs in major cities like Los Angeles and New York, but they do make a big difference. And the rules are especially burdensome for builders in suburbia or in outlying areas that get little attention from policymakers.
The Trump executive order is important not just because it takes on regulations that receive little attention from the press and from Congress but also because it squarely addresses issues under the control of the federal government itself. Before the president or Congress begins telling state and local governments how to reduce regulatory burdens, they should remember the timeless instruction: “physician, heal thyself.”
Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images