WASHINGTON — U.S. Sens. John Thune (R-S.D.) and Jerry Moran (R-Kan.) today introduced the Housing Supply Expansion Act, legislation that would address the shortage of affordable housing options across the nation by making targeted reforms to requirements under the Davis-Bacon Act, a 1930s-era labor law. These reforms would reduce labor costs and administrative burdens on construction contractors, which would free up capital that could be redirected toward building additional affordable housing.
“The lack of affordable housing is an issue that is consistently raised by folks as I travel throughout South Dakota,” said Thune. “These shortages affect prospective homebuyers and renters, as well as small businesses that are trying to overcome pressing workforce needs. This common-sense legislation would increase the supply of affordable housing options, reform archaic requirements in the Davis-Bacon Act, and cut through its overly-burdensome red tape.”
“Purchasing a home is a part of the American dream that is currently out of reach for many families,” said Moran. “Reducing the burden of federal regulations will help homebuilders meet the demand for new homes, making homeownership a reality for more Kansans.”
“At a time when the nation is facing an unprecedented housing affordability crisis, the Housing Supply Expansion Act will make a real difference in reforming deep flaws in the Davis-Bacon wage process, in turn supporting the development and preservation of affordable housing,” said Doug Bibby, president of the National Multifamily Housing Council. “With housing demand higher than ever before, we should be doing all we can to reduce costs and find creative ways to expand housing opportunity to all those in need.”
Enacted in 1931, the Davis-Bacon Act requires construction contractors involved in certain federally funded or federally assisted construction contracts, like those awarded as part of the various federal housing programs, to pay individuals working on the contract at least the prevailing wages of the vicinity in which the construction project is located. The Davis-Bacon Act – as it stands – can disincentive the construction of affordable housing due to the high costs it places on construction contractors. The U.S. Department of Labor (DOL) sets these prevailing wage rates by reviewing data submitted by construction contractors through voluntary surveys, which can be, at times, inaccurate or inconsistent. Recently, DOL initiated a rulemaking that would update certain tenets of the Davis-Bacon Act.