Attention Regulators: Listen to Small Businesses

Filed in Advocacy, Codes and Standards by on March 29, 2017 9 Comments
randy Noel

Senior Officer Randy Noel testifies at the hearing.

NAHB today called on Congress to work with federal regulators to fix the regulatory rulemaking process by ensuring that effects on small businesses are a primary focus for existing and future regulations.

Testifying before the Senate Committee on Small Business & Entrepreneurship, NAHB First Vice Chairman Randy Noel told lawmakers that builders must navigate an ever-increasing tangle of regulations.

“On average, regulations imposed by government at all levels account for nearly 25% of the final price of a new single-family home,” said Noel.

This is not just a problem for the small businesses that build them. NAHB research shows that approximately 14 million American households are priced out of the market for a new home by government regulations.

“It is therefore imperative that new and existing regulation must address policy objectives while acknowledging the burdens of compliance, particularly for small businesses,” said Noel.

A Flawed Silica Rule

Compliance with the Regulatory Flexibility Act, which requires federal agencies to review regulations for their impact on small businesses and consider less burdensome alternatives, continues to fall far short of the act’s objective, Noel told lawmakers.

As an example, he cited a rule issued by the Occupational Safety and Health Administration (OSHA) to regulate worker exposure to crystalline silica that OSHA said carried a cost estimate to the construction industry of approximately $511 million per year.

An independent study found that the true cost would be nearly $5 billion per year. The study found that the OSHA cost analysis had omitted some 1.5 million workers in the construction industry who routinely perform dusty tasks on silica-containing materials and it failed to account for a variety of indirect costs associated with set-up, clean-up, materials, and productivity penalties.

“Complying with the resulting rule is both technologically and economically infeasible for businesses and more importantly, the rule will do little to improve the health and safety of my workers,” said Noel.

“Congress must provide some direction to address the problem of poor or non-existent economic impact analyses,” he added. “NAHB believes it is critical to include indirect costs as part of any economic impact analysis. Additionally, economic analysis should be reviewed by a non-partisan, third party. Implementing these changes will undoubtedly improve the analysis and provide a more accurate accounting of the burdens small businesses face in complying with regulations.”

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Comments (9)

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  1. Way to go, Randy! We need a lot more truth-telling like this in the halls of Congress!

  2. Frank Morse says:

    NOLA commends our 1st Vice Chair on his constant and ever present commitment to NAHB, our members and all of the businesses and people that are affected by rules and regulations that impact our industry with disregard for how they may cause irreparable harm from overburdening restrictions. Thank you Randy from HBA of Greater New Orleans!! (Noel paradise 🙂

  3. Ted Roberts says:

    Please stop damaging the builders with with flawed regulations.

  4. Harry Crowell says:

    This is correct. We homebuilders have been at the bottom of the pile when it comes to affordability for our homes.
    The direct cost of labor and material is not the problem in affordability.
    the true costs are the constant changes in codes, engineering, time to have the local building departments tear apart our plans from the engineers and architects we use the delays in waiting for these “corrections”, the constant delays in getting the local building department to inspect the work so the next part of construction can start, the higher cost of insurance to pay for the expected class action by the lawyers insisting there is poor construction and equipment installed. On top of all of this are the constantly increasing fees, taxes, improvement standards for offsite work by the local community governments to pay for additional community extractions of every imaginable type.
    After these are all added to the direct cost of the homes and the sale is closed we are paying the additional cost of sales commissions, taxes, escrow, insurance, points, interest, G&A while the job sits for weeks, and the list goes on and on. The additional add on is about 40%.
    How do we get this information out to those that are demanding affordability and more government intrusion and costs to our builders

  5. Bill Rodgers says:

    I have been a code official for more than 20 years. I have seen the residential code grow by more than 35% in volume over a 6 year span. it’s reached a point that I am embarrassed to tell builders about some of the things they have to do now to comply with the codes. After the residential sprinkler code hit and I found how the code development process worked, I became active in the code development process to bring the codes back to what they were originally intended to be- minimum construction and life safety standards.
    I currently serve as code development chairman for ICC Region IX and am chairman of the Mississippi Building Code Council. I wish I had more time to devote to the code development process and to lobby for changing the ICC process to prevent industry from using codes to sell their products.
    Let me know if I can help the NAHB. I will be more than happy to let lawmakers know how frustrated code officials have become with the insurmountable regulations we are forced to administer.
    BTW: I am also a licensed builder and serve on my local and state HBA boards.
    Bill Rodgers, AIBD, CBCO

  6. Scott Glick says:

    Federal regulations are just part of the issue. A perfect example of local regulations is the Larimer County, CO. requirement, where I live, that even if you follow the prescriptive path to meet the energy requirements of the building envelope, you still need to get a blower door test (performance test) to pass the local requirements. This adds another few hundred dollars to the home cost. It is important that officials at all levels of government better understand the complexities of government regulation and the cumulative impacts of them, not just the parochial impacts.

  7. Robert Clark says:

    Thank you Randy for being our voice in Washington and helping small businesses .

  8. It is important to keep in mind that complex, onerous regulations are not meant to promote “safety.” They are meant to create job security for bureaucrats. As Scott Glick commented, the bureaucracies pile on the regulations and red tape from all sides. This is not done to benefit the public. It is job security and funding for bureaucrats.

  9. Jim Fine says:

    Thanks Randy, hope you helped on getting rid of the silica rule, it’s a killer on both new home construction & remodeling, plus I’m getting tired of wearing my EPA suit when I clean my grill.

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