U.S. Sen. Jerry Moran (R-KS) recently introduced legislation to reform the prevailing wage requirements under the Davis-Bacon Act.
Enacted in 1931, the Davis-Bacon Act requires construction contractors involved in certain federally funded or federally assisted construction contracts to pay individuals working on the contract at least the prevailing wages of the vicinity in which the construction project is located.
Moran said this can disincentivize the construction of affordable housing due to the high costs it places on construction contractors and the administrative requirements that accompany it.
The prevailing wage rates are set by the U.S. Department of Labor by reviewing data submitted by construction contractors through voluntary surveys. Moran said this data can be inaccurate or inconsistent, at times.
“Buying a home is a part of the American dream that is currently out of reach for many families,” Moran said. “Reducing the burden of federal regulations will help homebuilders meet the demand for new homes, making homeownership a reality for more Kansans.”
Specifically, the Affordable Housing Expansion Act (S. 3092) would make targeted reform to the Davis-bacon Act that would reduce labor costs and the administrative requirements on residential construction contractors.
“The improper application of Davis-Bacon wage rates is an unnecessary barrier to the modernization and development of multifamily housing, and this bill will help reduce the administrative burden and complexity for residential housing projects. MBA will continue to advocate on behalf of policies that both ensure a healthy real estate market and provide consumers with sustainable housing choices,” said Bill Killmer, senior vice president of legislative and political affairs of the Mortgage Bankers Association.