Are environmental rules adding costs to new housing?
The Mortgage Bankers Association (MBA) has urged the US Department of Housing and Urban Development (HUD) to reassess environmental requirements in its Multifamily Accelerated Processing (MAP) program, claiming these rules are delaying projects and inflating housing costs.
In a letter addressed to HUD secretary Scott Turner, MBA president Robert Broeksmit expressed concern over environmental provisions in the MAP Guide that the group says are not supported by law or regulation and have been adding “significant expense and time to multifamily projects.”
“We strongly encourage HUD to review the necessity of these requirements, given the high demand for housing,” MBA wrote, referencing the long-standing housing affordability crisis and the federal goal of expanding housing supply.
Environmental rules under scrutiny
The letter identifies a dozen areas where MBA says regulatory overreach is obstructing development. Chief among them are new requirements implemented since the 2011 MAP Guide revision, which the group argues are burdensome and often unnecessary.
One example includes rules concerning buried underground pipelines. Despite federal definitions stating such pipelines are not a hazard, the 2020 MAP Guide requires analyses within a one-mile radius—an approach the MBA claims has delayed or canceled numerous projects.
Similarly, noise standards, originally designed to ensure livable conditions, are now criticized for forcing project redesigns and increased mitigation costs even when interior noise levels are manageable through modern construction methods.
Other flagged issues include fall hazard analyses around common structures, high-voltage transmission line setbacks, and mandatory vibration testing near transit lines—all of which the MBA says raise costs with little demonstrable benefit to safety or quality.
Broader reform in line with executive order
MBA’s letter comes as President Donald Trump’s administration repeals several federal regulatory frameworks. A recent executive order eliminated prior rules under the National Environmental Policy Act (NEPA), granting HUD more leeway in reshaping its policies.
HUD’s current practices, according to the MBA, diverge from those adopted by Fannie Mae and Freddie Mac, which have recently eased their requirements on climate-related risk and radon based on local conditions.
Proposed changes
To streamline approvals, MBA is asking HUD to:
- Revert to earlier guidance for noise and pipeline safety.
- Remove fall zone studies for common site features.
- Allow early site preparation and non-critical repairs during the review process.
- Limit environmental reviews to housing units, excluding infrastructure like roads and utilities.
- Stop requiring will-serve letters from entities such as fire departments and school districts.
“Commonsense updates will reduce regulatory barriers, expedite processing, lower costs, and increase the production of quality multifamily housing,” Broeksmit stated.
The association expressed readiness to collaborate with HUD to modernize MAP guidelines, citing declining loan volume as a sign of the system’s inefficiencies. HUD issued 816 commitments in FY2024, a 52% drop from FY2021.
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