U.S. Sens. Jerry Moran (R-KS) and John Thune (R-SD) on May 18 proposed legislation that would amend United States Code regarding prevailing wage determinations in order to expand access to affordable housing by reducing costs for construction contractors working on a federal building contract.
Sen. Thune sponsored the Housing Supply Expansion Act, S. 1682, with cosponsor Sen. Moran to reform requirements under the Davis-Bacon Act of 1931 that would reduce labor costs and administrative burdens on residential construction contractors. In turn, capital would be freed up and redirected toward affordable housing, according to a bill summary provided by the lawmakers.
“Affordable housing shortages directly affect prospective homebuyers and renters, but they also impact small businesses that are trying to overcome pressing workforce needs,” said Sen. Thune. “I continue to hear about this issue from folks across South Dakota, and I’m proud to lead this common-sense legislation that would reform archaic requirements in the Davis-Bacon Act, cut through its overly burdensome red tape, and increase the supply of affordable housing.”
The Davis-Bacon Act requires construction contractors involved in certain federally funded or federally assisted contracts, including various federal housing programs, to pay individuals working on the contract at least the prevailing wages of the vicinity where the construction project is located, the summary says.
As a result, say the lawmakers, this law tends to disincentivize the construction of affordable housing due to the high costs construction contractors must pay.
“Purchasing a home is a part of the American dream that is currently out of reach for many families,” said Sen. Moran. “Reducing the burden of federal regulations will help homebuilders meet the demand for new homes, making homeownership a reality for more Kansans.”
The National Association of Home Builders and the Mortgage Bankers Association support the measure.