'It's not a housing crisis, but a housing policy crisis': Homebuilders denounce hurdles as prices rise

Across the country, homebuilders are sounding the alarm about the growing affordability crisis gripping the housing market. In Wichita, Kansas, local builder Carl Harris has seen the price of his new homes skyrocket, putting them out of reach for many families.

“The payment for that house two and a half years ago was approximately $1,700. Today, it's just over $3,000,” Harris, who chairs the National Association of Home Builders, told NBC News. “That continues to leave a number of people out of the market and that's where the real concern is.”

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Harris isn't the only one feeling the pressure. Home builders across the country are struggling to keep up with the growing demand for affordable housing as construction costs skyrocket. The extra $120,000 Harris has to charge for his homes covers rising costs for materials, labor and land.

“It's not a housing crisis, it's a housing policy crisis and if we can get policymakers to fix it, then maybe we can reduce some of the costs and lessen the fight for existing housing,” Harris said.

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Benzinga previously reported a nationwide shortage of about 1.5 million housing units, which has caused a 50% increase in home prices over the past five years.

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“There is no single, simple, scalable solution,” said Robert Dietz, NAHB chief economist. “It took us about a decade to get to this situation. It will probably take us about a decade to get out.”

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With construction of single-family homes down 6% last year and the number of new constructions in July matching 2017 levels, home builders say a web of challenges ties their hands. A severe labor shortage tops the list: The construction industry lost more than two million workers after the 2007 mortgage crisis, leaving hundreds of thousands of jobs unfilled.

“We can only deliver a limited number of homes because of labor constraints and so we have to keep figuring that out,” said Sheryl Palmer, chief executive of developer Taylor Morrison.

The NAHB pressed Congress in early July to enact a 10-point plan to address the affordability crisis, including reducing excessive regulations, fixing supply chain problems, and promoting careers in skilled trades.

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Steve Martinez, an Idaho homebuilder who testified on behalf of the group, told lawmakers that housing costs have become the single largest expense for American families.

“Housing inflation (rental and home ownership costs) continues to rise well above a 5% rate driven in large part by a nationwide shortage of 1.5 million housing units,” Martinez said. “The only way to control inflation and reduce housing costs is to remove the barriers that prevent builders from increasing housing production.”

Faced with great personal and economic risks, homebuilders are calling on authorities to act. As Forsum said, “I don't think people realize and appreciate how many factors go into what we do.”

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