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New Govt. Rules Further Multifamily’s Ascendence

by Chicago Agent

Recent government actions on multifamily housing seem to only confirm the property's ever-increasing importance in housing.

In a move that seems to confirm the ever-increasing importance of multifamily housing in the current housing market, the federal government is removing several state regulations that will make it easier for developers to build federally-subsidized multifamily homes, according to a recent HousingWire report.

Revealed on Monday, the plan was concocted by an alliance of the White House, the Department of Housing and Urban Development (HUD) and the U.S. Department of Agricultural Rural Development, and it will affect developments in Wisconsin, Michigan, Washington, Minnesota, Oregon and Ohio.

“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?'”

The plan primarily works through removing repeated inspections of federal properties and other repetitive procedures, and early projections place the savings from the changes at $28.8 million per year.

Tammye Treviño, who works at the U.S. Department of Agriculture Rural Development, said in 2007, 22,546 inspections were conducted by government officials on 10,485 properties; with the new plan in motion, those numbers would be cut in half, Treviño said in the HousingWire piece.

Multifamily units are among the few bright spots in housing right now. Rental units ranked the highest in the most recent National Association of Home Builders confidence survey, a recent Freddie Mac economic report showed renewed investment in multifamily properties and Fannie Mae even introduced a mortgage-backed security specifically for multifamily units earlier this year.

Regardless, nobody is admitting that the new plan explicitly targets multifamily construction. David Lipsetz, who works with HUD said costs and time were the government’s chief concern.

“The driver for what we are doing is to save time and resources around duplicative regulatory requirements,” Lipsetz said. “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.”

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