White House, agencies cut red-tape for some multifamily housing developers

Government agencies are peeling back a few regulatory requirements in several states to make it easier for developers of federally subsidized multifamily housing to develop properties without having to pay for redundant inspections and other repetitive guidelines. Officials from the White House, the Department of Housing and Urban Development and the U.S. Department of Agricultural Rural Development unveiled a pilot program Monday that will impact federally supported multifamily housing developers in the states of Wisconsin, Michigan, Washington, Minnesota, Oregon and Ohio. The pilot program recognizes that developers of federally subsidized multifamily housing complexes generally rely on multiple sources of state and federal funding. Those funding providers currently require developers to conduct multiple inspections and other procedural checks to satisfy the needs of each lending organization that puts money into the property. The pilot program removes the need for redundant inspections and other repetitive regulatory practices, which could save as much as $28.8 million per year. “This was born out of a series of conversations that we had at the state local, federal and private sector level,” said Derek Douglas with the White House Domestic Policy Council. “We asked developers what are the administrative burdens that you are facing?” he said. After compiling a report on what is holding developers back in terms of regulations, the White House, HUD and the Agricultural Rural Development Department came out with a few suggestions for improving the regulatory process. Tammye Treviño with the U.S. Department of Agriculture Rural Development said a rough estimate from a compilation of data shows HUD, housing finance agencies and other players in the affordable multifamily segment had to perform 22,546 separate inspections on 10,485 properties in 2007 — one of the more recent years studied. With the new program in place, that number could be reduced by at least half, she said. When asked if the streamlined inspection process was prompted by an expectation for  increased development in the affordable, multifamily segment, David Lipsetz with HUD said, “The driver for what we are doing is to save time and resources around duplicative regulatory requirements. May it spur additional development? That was not the driver for why they are doing with this. We held a number of stakeholder meetings at the White House and asked those funding properties day-to-day, what you are seeing at the local level.” Treviño added that the agencies wanted “to make good on our promise to streamline and improve federal government processes. We were trying to find those things that will create savings immediately.” Write to Kerri Panchuk.