PERSPECTIVE ON HOUSING : Red Tape Kills an American Dream : Make ownership affordable again by tying federal aid to the removal of state regulatory barriers.

Beth and Jack McCrandell got married last weekend. Jack, 24, is a firefighter, riding the same Southern California streets his father, Mac, once did. Beth, also 24, teaches ninth-graders at the school where she met Jack. Just like their parents, they plan to start a family soon and dream of striking it rich someday. But, unlike Mac, Jack and Beth are still years, perhaps decades, away from the American Dream: owning a home.

Beth and Jack are composite characters, but their story is real. Like 94% of their peers under 25, they cannot afford a starter home. They commute at least 40 minutes to work because they cannot afford to live in their hometown and still save toward buying a house.

The American Dream is choking on a knot of federal, state and especially local regulations. Problems like exclusionary zoning, exorbitant impact fees, long delays in permit approval and rigid environmental restrictions have raised the cost of housing by as much as 20%-25%. Home ownership is now beyond the reach of nine out of 10 renters in America.

Consider workers in Orange County whose day may begin at 4 a.m. because they can afford to live no closer to their jobs than a 70-mile congested commute away. Or the San Francisco-area builders whose costs jumped 126% in six years because of fees. Or the Southern California home buyers who pay $20,000 just to offset builders’ impact fees.

Some may believe that this is primarily a California problem, but the East Coast view is not better. As New Jersey’s governor for most of the 1980s, I tried to attract jobs and people. But I was handicapped as fees and delays bumped the sticker price of a home up 30%. One report showed that prices in some developments rose 100% in six years, due mainly to permit and regulatory delays.

Secretary of Housing and Urban Development Jack Kemp saw trouble looming, not just in states like New Jersey and California, but nationwide. By accident or design, regulatory barriers were diverting developers from affordable housing and blocking most households from ever holding the deed to a home.

So last year, Kemp asked former Ohio Congressman Lud Ashley to join me in studying the regulations that impede affordable housing and recommending ways to remove those barriers without endangering human health or the environment. Together with a 20-member commission drawn from government, private industry, housing advocacy, finance and academia, we held hearings around the country.

We found suburban statutes that make multifamily housing units all but impossible to build. In many Connecticut towns, you cannot build a home on less than two acres of land. In some areas near Chicago and Seattle, you need five acres per house.

Some Ohio communities require cul-de-sacs with a radius wide enough for the largest piece of fire equipment, the hook and ladder, even though these trucks are never used in single-family neighborhoods. Other towns use environmental regulations, not to preserve the ecology but to preserve the social status quo in their neighborhoods.

If suburbia’s most disturbing problem is deliberate, exclusionary zoning, city housing policy is often a bureaucratic nightmare. We found city codes that cripple rehabilitation projects, such as requiring that a whole building be rewired to meet state-of-the-art electrical codes when only small repairs are necessary.

Many cities disallow worthwhile housing solutions like single-room occupancy hotels, prefab housing or mobile homes. Others forbid what I call the “Jimmy Stewart solution”--the single room in Grandma Smith’s home that she wants to rent out to “a nice young fellow.”

We did witness a desire to cut red tape, especially at the state level. That’s where the leadership must come from. Washington can give incentives and lend expertise, but states have the constitutional authority, which they delegate to local governments, to control land use and development.

The report we present today to President Bush and Secretary Kemp urges HUD to tie state housing aid to the efforts of state governments to remove regulatory barriers. This is one among 30 recommendations, which include creating model codes and zoning acts for states to follow; placing time limits on building permit reviews and developing a one-stop permit process.

We must move quickly on these recommendations. Increasingly, we live in a land where our children cannot afford a decent place to live. We believe that our recommendations could lead to a 20%-30% reduction in the cost of the average home. If implemented, hundreds of thousands of families like Beth and Jack’s could afford a home. When they do, they will have security and--like their parents--a piece of the American Dream.