Testimony from:
Marc Hyden, Director of State Government Affairs, R Street Institute

In SUPPORT of HB 514 and 517

February 28, 2023

House Government Affairs Committee

Chairman and members of the committee,

My name is Marc Hyden. I am a Georgia resident and the director of state government affairs at the R Street Institute, a nonprofit, nonpartisan public policy research organization. Our mission is to engage in policy research and outreach to promote free markets and limited, effective government in many areas, including housing reform. That is why HB 514 and 517 are of special interest to us.

The state of Georgia, like many corners of the country, is facing an unprecedented housing shortage. Georgia Trend reports that the Peach State has the 10th worst housing deficit, and “[s]tatewide, the gap was 118,388 homes in 2019, an increase of 2,655% since 2012.” The gap has almost certainly worsened since then.

This shortage has helped drive up the costs of homeownership to astounding levels—making it unaffordable for many. Redfin reported that the average price of a house in Georgia was $336,000 as of January 2023. Three years ago, the average price was over $100,000 cheaper. Not surprisingly, the Cato Institute found that “[m]ost homeowners (55%) say they couldn’t afford to purchase their own home today based on current prices,” and the Federal Reserve designated Atlanta’s housing as unaffordable to the average buyer, which rings true. A majority of Gen Z’ers and millennials—people aged 18 to 41—want to own a home but cannot afford it.

While there are many variables causing this market dysfunction, it is fundamentally a supply issue. There is not enough supply to meet demand, and the limited inventory may be partially related to regulations hamstringing new home construction.

One of the easiest paths to fixing these issues is cutting red tape and ensuring that fees don’t overburden homebuilders. Thankfully, HB 514 and 517 would implement commonsense policies to ease these impediments and allow the free market to solve the crisis. They would streamline regulations, waive some fees to spark new growth, and prevent unnecessary prohibitions and regulations that discourage construction.

Specifically, HB 514 would limit to 180 days local governments’ ability to impose building moratoriums on residential construction. Georgia localities increasingly are imposing development restrictions for as long as one year in a misguided attempt to stop “overdevelopment.” Such NIMBY (not in my backyard) policies limit the ability of developers to meet housing demand—and amount to an unreasonable government restraint on the marketplace. They inflate the cost of housing by limiting supply. Localities tout the “local control” mantra, but it’s perfectly appropriate for the state to put limits on local government efforts to restrict the private construction market. The legislation also waives certain development fees and insists on reasonable rezoning timelines.

If Georgia is serious about improving housing affordability, it needs to—first and foremost—reduce artificial government restraints on construction. HB 514 is a step in the right direction. So is HB 517, which prohibits cities and counties from regulating “building design elements” on single-family homes except in historic districts. It’s not the place of government to dictate design standards. Builders and consumers are capable of working out such subjective matters on their own. These additional regulations serve as regulatory impediments to housing construction. The legislation also streamlines building codes and appropriately leaves design issues in the hands of private associations.

While there is no silver bullet to Georgia’s housing problems, HB 514 and 517 are important steps forward. Such measures will help homebuilders provide the supply and quality options that are so desperately needed. I therefore urge the committee to support freer markets and these measures. With the housing market languishing and numerous Georgians priced out of homeownership, time is of the essence.

Thank you for your time.

Marc Hyden
Director, State Government Affairs
R Street Institute
(404) 918-2731
[email protected]