Why Red Tape Reform Is Key to the Housing Bill’s Success

With the landmark 21st Century Road to Housing Act now law, local governments may finally rein in the red tape that is choking off the construction of new homes.The new law includes a $200 million "innovation fund," which would be a competitive grant program for local governments that can show they've taken steps to reform permitting, zoning, and other programs. Congress will need to fund the seven-year program in future budgets. But it targets an acute problem local governments face, experts tell Realtor.com®.Local governments have struggled for years to keep up with their own extensive permit and approval systems, while a cottage industry of startups has sprung up to help. The National Association of Home Builders estimated in a study that permits, building codes, inspections, and regulations account for over a quarter of the average sales price of a new home. Since a new home averaged $499,500 in January, NAHB put the cost of red tape at $131,734 per new home.The nation is already short millions of housing units, and it would take years to catch up even if the rules went away, according to a report on the housing supply gap from the Realtor.com economic research team.Beleaguered...