Addressing the prevailing wage determination process used for federally funded or assisted construction projects — such as affordable seniors housing — will help increase the nation’s housing supply and eliminate overly complex and unnecessary federal regulations, according to a coalition of housing providers and real estate professionals.

The American Seniors Housing Association joined a group including 14 other national real estate associations in a May 20 letter to US Department of Housing and Urban Development Secretary Scott Turner and US Department of Labor Secretary Lori Chavez-DeRemer, asking for the repeal and revision of the 2023 Updating the Davis-Bacon and Related Acts Regulations final rule.

ASHA said it finds common ground with real estate partners working to create affordable housing options for residents seeking multifamily, as well as senior living communities.

“As research has shown, there is great need to meet the needs of the middle market senior living resident, those who are not Medicaid-eligible and yet cannot afford most market rate properties,” Jeanne McGlynn Delgado, ASHA vice president of government affairs, told McKnight’s Senior Living. “With an aging population and the increasing demand for seniors housing, it is important that overly burdensome regulations and confusing rules don’t add to the cost of housing.”

The Davis-Bacon Act applies to certain federal and federally funded or federally insured construction contracts, including project-based voucher developments, Rental Assistance Demonstration Second Component contracts, Section 8 project-based vouchers and project-based rental assistance contracts.

The act requires that covered workers not be paid less than the area’s prevailing wage, and the fact that the statute doesn’t lay out how the DOL determines prevailing wages often leads to “inconsistency, confusion and higher costs for affordable housing developers,” according to the coalition.

Affordable housing projects often rely on federal financing to support construction. Many federal financing options trigger the act’s requirements, which the coalition said makes affordable housing developments both more expensive and more complicated than other projects. Specifically, the coalition is asking for the removal of the act’s requirements from HUD-financed single-family rental and multifamily housing developments. 

Delgado said ASHA joined the coalition seeking opportunities to improve the Davis-Bacon rules, adding that there is concern that the current rates are “inaccurate, tedious and don’t reflect true market rates in the construction industry, add to the cost of construction, as well as the increased cost to taxpayers.”

“Any overly burdensome requirements on projects completed through these programs directly hinder efforts to increase the supply of housing, particularly affordable housing, in the United States,” the letter stated. 

The coalition said that addressing the “harm” caused by the Davis-Bacon Act of 1931 would support the administration’s efforts to improve efficiency and reduce government waste while increasing the nation’s housing supply and affordability. Rescinding the final rule, according to the letter, would eliminate overly complex and unnecessary federal regulations and maximize taxpayer funding by lowering per-unit delivery costs for federally funded housing projects.

According to the coalition, the Davis-Bacon rule and requirements for housing projects “routinely leads to costly confusion and disruption.” The signers said they continue to support recommendations originally provided to the federal government in 2022 by several construction and rehabilitation financing and development organizations, including efforts to modernize, clarify and streamline the act’s requirements, especially for projects involving the residential construction industry. Several of the groups behind the 2022 recommendations are members of the coalition sending the May 20 letter.