Several members of Congress want to see the U.S. Small Business Administration consider how to better assist small companies in the homebuilding industry.
Indiana Sen. Todd Young and Nevada Sen. Jacky Rosen, a Republican and Democrat respectively, introduced Senate Bill 4241. It would require the SBA and the U.S. Department of Housing and Urban Development to identify ways for new assistance and lending for small companies in the homebuilding industry.
That includes homebuilders, contractors, and home improvement and repair companies. The senators want to see SBA and HUD find gaps in assistance programs and ways to streamline things like counseling and lending.
“Our bill will reduce barriers for small businesses involved in the housing industry, which will help increase housing supply and affordability for all Americans,” Young said.
Headwinds for the homebuilding industry
The U.S. homebuilding is shrinking and bigger firms account for more of the work. Harvard University researchers estimated the number of homebuilders fell 22% from 2002 to 2017. That meant a loss of almost 19,000 firms, thanks to the Great Recession and other factors.
Now, half of all home sales come from the top 100 homebuilders, compared to just one-third two years ago.
And the business has seen further pressures as a spate of major Japanese firms have bought regional and local builders. These vertically integrated firms aim to capitalize on the under-built U.S. housing market.
Small Business Majority, Reno + Sparks Chamber of Commerce, and the Nevada Housing Coalition are among the bill's backers.
Alexis D’Amato Falvey, senior director of federal government affairs at Small Business Majority, praised the measures to increase access to capital. That's especially important when homebuilders are also dealing with rising costs for materials, labor, and other necessities.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index shows builders have been increasingly nervous this year as a result.
"By supporting small businesses in the housing industry, we have the opportunity to boost the housing supply and lower costs, making the dream of buying a home for hardworking Americans a possibility," Rosen said.
